On December 1, 2016, Bamboo Company assigned specific accounts receivable totaling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The entity will continue to collect the assigned accounts receivable. In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discount of P100,000. On December 31, 2020, the entity remitted the collections to the bank in payment for the interest accrued on December 31, 2016, and the note payable. The entity accepted sales returns of P150,000 on the assigned accounts and wrote off assigned accounts of P200,000. 1. What amount of cash was received from the assignment of accounts receivable on December 1, 2016? a. 4,000,000 b. 3,000,000 c. 3,800,000 d. 2, 850,000 2. What is the carrying amount of note payable on December 31, 2016? a. 1,000,000 b. 1, 100,000 c. 1,130,000 d. 1,460,000 3. What is the balance of accounts receivable—assigned on December 31, 2016? a. 2,100,000 b. 2,000,000 c. 1,650,000 d. 1, 850,000 4. What amount should be disclosed as the equity of Bamboo Company in assigned accounts on December 31, 2016? a. 550,000 b. 870,000 c. 520,000
On December 1, 2016, Bamboo Company assigned specific accounts receivable totaling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The entity will continue to collect the assigned accounts receivable. In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discount of P100,000. On December 31, 2020, the entity remitted the collections to the bank in payment for the interest accrued on December 31, 2016, and the note payable. The entity accepted sales returns of P150,000 on the assigned accounts and wrote off assigned accounts of P200,000.
1. What amount of cash was received from the assignment of accounts receivable on December 1, 2016?
a. 4,000,000
b. 3,000,000
c. 3,800,000
d. 2, 850,000
2. What is the carrying amount of note payable on December 31, 2016?
a. 1,000,000
b. 1, 100,000
c. 1,130,000
d. 1,460,000
3. What is the balance of accounts receivable—assigned on December 31, 2016?
a. 2,100,000
b. 2,000,000
c. 1,650,000
d. 1, 850,000
4. What amount should be disclosed as the equity of Bamboo Company in assigned accounts on December 31, 2016?
a. 550,000
b. 870,000
c. 520,000
d. 970,000
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