Reference no: EM133096726

Question - On December 1, 2021, Autumn company assigned on a non-notification basis accounts receivable of Php3,000,000 to a bank in consideration for a loan of 80% of the receivables less a 5% service fee on the accounts assigned. The interest rate of the loan is 12% per annum. The company collected assigned accounts of Php2,000,000 and remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The interest rate is 1% per month on the outstanding balance of the loan.

1. How much cash did autumn receive at the time of the transfer?

a. Php3,000,000

b. Php2,400,000

c. Php2,280,000

d. Php2,256,000

2. In its December 31, 2021 statement of financial position, what amount should autumn report as current liability?

a. None

b. Php 400,000

c. Php 424,000

d. Php1,024,00