On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000.

On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...

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