Question

On October 31, 2021, T Company engaged in the following transactions: [1] Obtained a P500,000, 6-month loan from BDO, discounted at 12%. The company pledged P600,000 of accounts receivable as security for the loan. [2] Factored P1,000,000 of accounts receivable without recourse on a notification basis with Home Credit Company. Home Credit charged a factoring fee of 5% of the amount of receivables factored and withheld 10% of the receivables factored.

Name: on october 31 2021 t company engaged in the following transactions 1 obtained a p500000 6 month loan from bdo discounted at 12 the company pledged p600000 of accounts receivable as security 01488
Uploaded: 2022-04-28T12:19:07-08:00
Duration: 4 min 20 s
Channel: Manasvee Singh
Description: on october 31 2021 t company engaged in the following transactions 1 obtained a p500000 6 month loan from bdo discounted at 12 the company pledged p600000 of accounts receivable as security 01488

          On October 31, 2021, T Company engaged in the following transactions: [1] Obtained a P500,000, 6-month loan from BDO, discounted at 12%. The company pledged P600,000 of accounts receivable as security for the loan. [2] Factored P1,000,000 of accounts receivable without recourse on a notification basis with Home Credit Company. Home Credit charged a factoring fee of 5% of the amount of receivables factored and withheld 10% of the receivables factored.

Added by Bego-A G.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Manasvee Singh

04/28/2022

Step 1

Step 1: Calculate the net cash received from the loan: Loan obtained from BDO: P500,000 Discount on loan (12% for 6 months): P30,000 Net cash received from the loan: P470,000 Show more…

Show all steps

Thanks for your feedback!

On October 31, 2021, T Company engaged in the following transactions: [1] Obtained a P500,000, 6-month loan from BDO, discounted at 12%. The company pledged P600,000 of accounts receivable as security for the loan. [2] Factored P1,000,000 of accounts receivable without recourse on a notification basis with Home Credit Company. Home Credit charged a factoring fee of 5% of the amount of receivables factored and withheld 10% of the receivables factored.