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How much would be the balance of accounts receivable

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Question - On May 1, 2020, ABC Incorporated factored 3,000,000 of its 10,000,000 accounts receivable on a without recourse basis to XYZ Bank. Sam charged 5% service fee and retained a holdback of 20%. Of the total accounts receivable factored, 2,750,000 were collected and the remaining amount were recognized as sales returns.

a. How much was the cash proceeds from the factoring of accounts receivable to be recognized on May 1?

b. How much gain or loss shall be recognized from the factoring of accounts receivable?

c. How much would be the balance of accounts receivable account immediately after factoring the accounts receivable?

d. How much would be received by ABC from XYZ Bank on final settlement of the factors holdback?

Reference no: EM133013606

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