Otter company has a receivable amounting to P1,200,000 otter had previously established an allowance for bad debts of 50,000 in connection with these receivables. otter company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. the remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. control was surrendered by Otter. the fair value of the recourse obligation is P26,000 The loss on factoring to be recognized by Otter Company is?

Otter company has a receivable amounting to P1,200,000 otter had previously established an allowance for bad debts of 50,000 in connection with these receivables. otter company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. the remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. control was surrendered by Otter. the fair value of the recourse obligation is P26,000 The loss on factoring to be recognized by Otter Company is?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 26Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer...

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Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It convert this note and interest to accounts receivable. After some time, Orion is still unable to collect the debt and it decides to sell the converted note to a collection agency. The collection agency will pay only 20% of the value of accounts receivable to Orion. What is the amount of cash paid to Orion from the collection agency? A. $5,000 B. $5,050 C. $20,000 D. $19,950
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A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
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Otter Company has a receivable amounting to P1,200,000; Otter had previously established an Allowance for bad debts of P50,000 in connection with these receivables. Otter Company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. The remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. Control was surrendered by Otter. The fair value of the recourse obligation is P26,000. The loss on factoring to be recognized by Otter Company is
36. Otter Company has a receivable amounting to P1,200,000; Otter had previously established an Allowance for bad debts of P50,000 in connection with these receivables. Otter Company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. The remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. Control was surrendered by Otter. The fair value of the recourse obligation is P26,000. The loss on factoring to be recognized by Otter Company is?37. Starboy Company has the following data relating to accounts receivable for the year ended December 31, 2022: Accounts receivable, January 1, 2022 P 480,000 Allowance for doubtful accounts, 1/1/22 28,600 Cash sales 300,000 Sales on account, terms: 2/10, 1/15, n/30 2,560,000 Cash received from customers during the year 2,400,000 Accounts written off during the year 17,600 Cash refunds given…
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Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000). Mountain High anticipates a $3,000 recourse obligation. The bank charges a 2% fee (2% of $60,000), and requires that amount to be paid at the start of the factoring arrangement.Required:Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2021, the company transferred $800,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits 90% of the factored amount and retains 10%. When Milpitas collects the receivables, it remits to Samson the retained amount less a 4% fee (4% of the total factored amount). Samson estimates the fair value of the last 10% of its receivables to be $60,000.Required:Prepare the journal entry for Samson Wholesale Beverage for the transfer of accounts receivable on April 30, assuming the sale criteria are met.