On February 1, 2004, Mickey Mouse Corporation factored receivables amounting to P500,000 to Minnie Mouse Corporation for P350,000. It has an allowance for uncollectible accounts of 3%. Minnie Mouse retains 5% of the receivables as factors holdback. Relative to this transaction, you are to determine the amount of gain or loss on sale to be reported in the income statement of Mickey Mouse Company for February. 135,000 loss 135,000 gain 139,500 loss 139,500 gain
On February 1, 2004, Mickey Mouse Corporation factored receivables amounting to P500,000 to Minnie Mouse Corporation for P350,000. It has an allowance for uncollectible accounts of 3%. Minnie Mouse retains 5% of the receivables as factors holdback. Relative to this transaction, you are to determine the amount of gain or loss on sale to be reported in the income statement of Mickey Mouse Company for February. 135,000 loss 135,000 gain 139,500 loss 139,500 gain
Chapter6: Business Expenses
Section: Chapter Questions
Problem 43P
Related questions
Question
On February 1, 2004, Mickey Mouse Corporation factored receivables amounting to P500,000 to Minnie Mouse Corporation for P350,000. It has an allowance for uncollectible accounts of 3%. Minnie Mouse retains 5% of the receivables as factors holdback. Relative to this transaction, you are to determine the amount of gain or loss on sale to be reported in the income statement of Mickey Mouse Company for February.
135,000 loss
135,000 gain
139,500 loss
139,500 gain
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning