Jennie Company assigned on a notification basis P4,000,000 of accounts receivable to a finance entity as security for a loan of P3,500,000. The finance entity charged a 6% commission on the amount of loan and interest on the note of 10%. During the first month, the finance entity collected P1,200,000 on the assigned accounts after deducting sales discounts of P150,000. The finance entity accepted sales returns worth P100,000 and wrote assigned accounts totaling P50,000. What is the amount of cash received from the finance entity at the time of the transfer?

Jennie Company assigned on a notification basis P4,000,000 of accounts receivable to a finance entity as security for a loan of P3,500,000. The finance entity charged a 6% commission on the amount of loan and interest on the note of 10%. During the first month, the finance entity collected P1,200,000 on the assigned accounts after deducting sales discounts of P150,000. The finance entity accepted sales returns worth P100,000 and wrote assigned accounts totaling P50,000. What is the amount of cash received from the finance entity at the time of the transfer?

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 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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