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What amount of loss on factoring should Hope World recognize

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Reference no: EM133081525

Question - Hope World Company factored Php600,000 of accounts receivable to Hangsang Company on July 1, 2021. Control was surrendered by Hope World. Hangsang accepted the receivables subject to recourse for nonpayment. Hagsang assessed a fee of 2% and retains a holdback equal to 5% of the accounts receivable. The fair value of the recourse obligation is Php12,000.

1. Hope World will receive and record cash of

a. Php546,000

b. Php558,000

c. Php570,000

d. Php576,000

2. What amount of loss on factoring should Hope World company recognize?

a. None

b. Php12,000

c. Php24,000

d. Php42,000

Reference no: EM133081525

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