Problem 8-14 (IAA) December 1, 2020, Solvent Company assigned specifie accounts receivable totaling P5,000,000 as collateral on a P4.000,000 12% note from a certain bank. The entity will continue to collect the assigned accounts receivable, addition to the interest on the note, the bank alao charged 5% finance fee deducted in advance on the assigned accounts. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discount of P200,000. On December 31, 2020, the entity remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable. The entity accepted sales returns of P100,000 on the assigned accounts and wrote off assigned accounts of P300,000. 1. What amount of cash was received from the assignment of accounts receivable on December 1, 2020? a. 4,000,000 b. 3,800,000 c. 4,750,000 d. 3,750,000 2. What is the carrying amount of note payable on December 31, 2020? a. 1,840,000 b. 2,140,000 c. 2,240,000 d. 2,200,000 3. What amount should be disclosed as the equity of Solvent Company in assigned accounts on December 31, 2020? a. 260,000 b. 400,000 c. 360,000 d. 760,000
Problem 8-14 (IAA) December 1, 2020, Solvent Company assigned specifie accounts receivable totaling P5,000,000 as collateral on a P4.000,000 12% note from a certain bank. The entity will continue to collect the assigned accounts receivable, addition to the interest on the note, the bank alao charged 5% finance fee deducted in advance on the assigned accounts. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discount of P200,000. On December 31, 2020, the entity remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable. The entity accepted sales returns of P100,000 on the assigned accounts and wrote off assigned accounts of P300,000. 1. What amount of cash was received from the assignment of accounts receivable on December 1, 2020? a. 4,000,000 b. 3,800,000 c. 4,750,000 d. 3,750,000 2. What is the carrying amount of note payable on December 31, 2020? a. 1,840,000 b. 2,140,000 c. 2,240,000 d. 2,200,000 3. What amount should be disclosed as the equity of Solvent Company in assigned accounts on December 31, 2020? a. 260,000 b. 400,000 c. 360,000 d. 760,000
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...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
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.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,