(b) Prepare ihe e (6) On its second year of operations, Highlander Commpany thought of expanding its business In order to generate additional cash nocessary for this expansion, on September 1, 200...
(b) Prepare ihe e (6) On its second year of operations, Highlander Commpany thought of expanding its business In order to generate additional cash nocessary for this expansion, on September 1, 2009, the company factored P 800,000 of accounts receivable to Ace Finance Company. Factoring fee was 10% of the recevables purchased. The finance company withheld 5% of the purchase price as protection against sales returns and allowances. On November 1, 2009, accounts receivable amounting to P1,000,000 was assigned to City Bank as collateral on P 600,000, 20% annual interest rate loan. A 3% finance charge was deducted in advance. December 31, 2009 data relating to accounts reccivable follow Allowance for doubtful accounts- P 13,400 (credit) Estimated uncollectibles-2% ofaccounts receivable Accounts roccivable, excluding factorod and assigued accounis- P 190,000. accounts were collocted. Nonc of the assigued (a) Entry to record factoring and general assigament of accounts recelvabla (b) Entry to adjust the allonwance for doubigjul eccounts at December 31, 2009
(b) Prepare ihe e (6) On its second year of operations, Highlander Commpany thought of expanding its business In order to generate additional cash nocessary for this expansion, on September 1, 2009, the company factored P 800,000 of accounts receivable to Ace Finance Company. Factoring fee was 10% of the recevables purchased. The finance company withheld 5% of the purchase price as protection against sales returns and allowances. On November 1, 2009, accounts receivable amounting to P1,000,000 was assigned to City Bank as collateral on P 600,000, 20% annual interest rate loan. A 3% finance charge was deducted in advance. December 31, 2009 data relating to accounts reccivable follow Allowance for doubtful accounts- P 13,400 (credit) Estimated uncollectibles-2% ofaccounts receivable Accounts roccivable, excluding factorod and assigued accounis- P 190,000. accounts were collocted. Nonc of the assigued (a) Entry to record factoring and general assigament of accounts recelvabla (b) Entry to adjust the allonwance for doubigjul eccounts at December 31, 2009