Potential liability conditional liability contingent

Potential liability.
Conditional liability.
Contingent liability.
9. It is a mode of receivable financing where the rights to specific receivables are not
formally assigned but appropriate footnote disclosure may still be required. *
Factoring
Assignment
Discounting
Pledge
*
Multiple Choice - Problem Solving
1. On October 31, 2021, Bundle Company engaged in the following transactions: (1)
Obtained a P500,000, six-month loan from City Bank, discounted at 12%. The company
pledged P500,000 of accounts receivable as security for the loan. What is the total cash
received from the financing of receivables? *

2. Bruno received from a customer a one-year, P375,000 note bearing note bearing
annual interest of 8%. After holding the note for six months, Bruno discounted the note
at Super Bank at an effective interest rate of 10%. If the discounting is treated as a
conditional sale, what amount of loss on discounting should Bruno recognize? *
3. Hollie Star Company received a 90-day, 6% note for P80,000, dated March 12 from a
customer on account. Journalize the entry at maturity date to record the receipt of the
payment of the note. *
4. On December 1, 2021, Hero Company assigned P400,000 of accounts receivable to
Halo Company as a security for a loan of P335,000. Hero Company charged a 2%
commission on the amount of the loan; the interest rate on the note was 10%. During
December, Hero collected P110,000 on assigned accounts after deducting P380 of
discounts. Hero accepted returns worth P1,350 and wrote off accounts totaling P2,980.
What is the carrying amount of the accounts receivable assigned as of December 31,
*
5. On July 1, 2019, Maricris Company received a P20,000 promissory note from Jordyn
Company. The annual interest rate is 5%. Principal and interest are paid in cash at the
maturity date of June 30, 2020. If Maricris’s fiscal year ends September 30, 2019, an
adjusting entry is needed to: *
6. Banco de Oro has loaned P9,000 to Northern Star Company, using a 90-day non-
interest-bearing note. The bank discounted the note at 7%. The credit to discount on
Notes Receivable in the general journal will be in the amount of *