PURE Corporation needed cash to meet current operating needs. PURE factored some P6,000,000 of accounts receivable to HSBC. An allowance for doubtful accounts of 10% of the receivable balance is maintained by PURE. The bank withheld 10% of the purchase price as protection against sales returns and allowances and charged a commission fee of 15% on the gross accounts receivable balance. Sales returns against the factored receivables during the collection period totaled P200,000. How much was recognized as a loss from the sale of PURE's receivables to HSBC?

Company sold accounts receivable without recourse for 6,100,000. The entity received 4,000,000 cash immediately from the factor. The remaining 275,000 will be received once the factor verifies that none of the account receivable is in dispute. The accounts receivable had a face amount of 5,200,000. The entity had previously established an allowance for bad debts of 230,000 in connection with such accounts.  What amount of loss on factoring should be recognized?  A. 925,000 b. 295,000 c. 695,000                               d. 965,000

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Dongguk Industry began the accounting year of 2010 with accounts receivable balance of $650,000 and a balance in the allowance for doubtful accounts (bad debts) of $19,500. During 2010, credit sales totaled $7,290,000 and cash collected from customers totaled $7,500,000. Actual write-offs of specific accounts receivable in 2010 were $19,000, as this amount turned out to be finally uncollectible. At the end of the year, an accounts receivable analysis, using the percentage of accounts receivable method (aging method), indicated a required (desired) allowance for doubtful accounts balance of $12,600. No accounts receivable previously written off were collected.   Required:   1. Provide relevant journal entries to record the transactions during 2010 (including credit sales, cash collection from customers, and write-off of uncollectible accounts receivable).   2. Provide an (adjusting) entry to record bad debt expense at the end of 2010.     3. What is the net realizable value(net book…

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Mountain High Ice Cream Company reports under IFRS. Mountain High transferred $70,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 80% of the factored amount to Mountain High and retains 20% 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 $6,000). Mountain High anticipates a $4,000 recourse obligation. The bank charges a 1% fee (1% of $70,000), and requires that amount to be paid at the start of the factoring arrangement. Mountain High has transferred control over the receivables, but determines that it still retains substantially all risks and rewards associated with them. Required: Prepare the journal entry to record the transfer on the books of Mountain High, considering whether the sale criteria under IFRS have been met. Note: If no entry is required for a transaction/event, select "No journal entry…

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,…

Mountain High Ice Cream Company transferred $66,000 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 $5,600). Mountain High anticipates a $3,600 recourse obligation. The bank charges a 2% fee (2% of $66,000), 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the transfer of accounts receivable. Note: Enter debits before credits. General Journal Debit Credit Event 1 Cash Loss…

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Union Company is considering establishment of a​ zero-balance account. The firm currently maintains an average balance of $418,000 in its disbursement account. As compensation to the bank for maintaining the​ zero-balance account, the firm will have to pay a monthly fee of $1,110 and maintain a $298,000 ​non-interest-earning deposit in the bank. The firm currently has no other deposits in the bank. Evaluate the proposed​ zero-balance account, and make a recommendation to the​ firm, assuming that it has an opportunity cost of 12.6%. The current opportunity cost is $ ?. (round to the nearest dollar.)