Seatwork - AR-NR-LR.docx - Seatwork AR-NR-LR On the...

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Seatwork – AR-NR-LR On December 31, 2017, the receivable account of Henio Group of Companies is consisted of the following: Accounts Receivable P 2,500,000 Notes Receivable 1,900,000 Loans Receivable 3,000,000 Allowance for doubtful accounts 50,000 Information on receivable and transaction for 2018 were as follows: Accounts Receivable Sales - cash and credit – P6,750,000 Collections from account customers of which 60% are from customer who avails the discount of 2%, and 10% are from customers who avails the 1% discount – P3,500,000. Account receivable written off as worthless, of which P20,000 were recovered which are not included in the collections – P35,000. Sales returns of which 40% represents cash refund which is also 4% of cash sales– P55,000. The company has the policy of providing a monthly doubtful account equal ¼% of credit sales net of returns, before making the adjustment at the year-end using receivable as basis for bad debts. During the year, the company also made a receivable financing agreement as follows: o Factored P1,000,000 of the receivable on November 15, 2017, and was charged with 5% assessment fee and 15% interest computed on weighted average time to maturity of 45 days. The company agreed to maintain 10% equity on receivable factored. By the end of the year, all the receivable
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