Tagum Inc. required additional cash for its operation and used accounts receivable to raise such needed cash, as follows:On December 1, 2021 Tagum Inc. assigned on a non-notification basis accounts receivable of P 5,000,000 to a bank in consideration for a loan of 90% of the receivables less 5% service fee on the accounts assigned. Tagum Inc. signed a note for the bank loan. On December 31, 2021, Tagum Inc. collected assigned accounts of P 3,000,000 less discount of P 200,000. Tagum Inc. 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.Tagum Inc. sold P 1,550,000 of accounts receivable for P 1,340,000 . The receivables had a carrying amount of P 1,470,000 and were sold outright on a nonrecourse basis.Tagum Inc. received an advance of P 300,000 from Union Bank by pledging P 360,000 of accounts receivableOn June 30, 2021, Tagum Inc. discounted at a bank a customer’s P 600,000 , 6-month , 10% note receivable dated April 30, 2021. The bank discounted the note at 12% on the same date.1. In its December 31, 2021 statement of financial position, Tagum Inc. shall report notes payable as current liability atA. P 1,545,000B. P 1,700,000C. P 1,745,000D. P 2,250,0002. Tagum Inc.’s equity in the assigned accounts receivable as at December 31, 2021 isA. P 0B. P 255,000C. P 300,000D. P 455,0003. The entry to record the sale of accounts receivable would includeA. A debit to Finance Charge of P 210,000B. A credit to Accounts Receivable of P 1,470,000C. A debit to Allowance for Doubtful Accounts of P 80,000D. A credit to Notes Payable of P 1,550,000

Working note :- Particulars Amiunt P Amiunt P Amount of A/cs Receivables 5,000,000 Loan…

Answered: Tagum Inc. required additional cash fo

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...

See similar textbooks

Related questions

Question

Tagum Inc. required additional cash for its operation and used accounts receivable to raise such needed cash, as follows:

On December 1, 2021 Tagum Inc. assigned on a non-notification basis accounts receivable of P 5,000,000 to a bank in consideration for a loan of 90% of the receivables less 5% service fee on the accounts assigned. Tagum Inc. signed a note for the bank loan. On December 31, 2021, Tagum Inc. collected assigned accounts of P 3,000,000 less discount of P 200,000. Tagum Inc. 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.
Tagum Inc. sold P 1,550,000 of accounts receivable for P 1,340,000 . The receivables had a carrying amount of P 1,470,000 and were sold outright on a nonrecourse basis.
Tagum Inc. received an advance of P 300,000 from Union Bank by pledging P 360,000 of accounts receivable
On June 30, 2021, Tagum Inc. discounted at a bank a customer’s P 600,000 , 6-month , 10% note receivable dated April 30, 2021. The bank discounted the note at 12% on the same date.

1. In its December 31, 2021 statement of financial position, Tagum Inc. shall report notes payable as current liability at

A. P 1,545,000

B. P 1,700,000

C. P 1,745,000

D. P 2,250,000

2. Tagum Inc.’s equity in the assigned accounts receivable as at December 31, 2021 is

A. P 0

B. P 255,000

C. P 300,000

D. P 455,000

3. The entry to record the sale of accounts receivable would include

A. A debit to Finance Charge of P 210,000

B. A credit to Accounts Receivable of P 1,470,000

C. A debit to Allowance for Doubtful Accounts of P 80,000

D. A credit to Notes Payable of P 1,550,000

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions