Reference no: EM132672840

Problem 1: On July 1, AIG Inc. assigned P2,000,000 of accounts receivable to a bank under a notification arrangement. The bank loans 50% less 4% charge on the gross amount assigned. AIG Inc. signed a promissory note that provides 2% interest per month on the unpaid loan balance. On July 31, AIG Inc. received notice from the bank that P800,000 of the assigned accounts were collected less 5% discount. A check was sent to the bank for the interest. On August 31, AIG Inc. received notice from the bank that P500,000 of the assigned accounts were collected. Final settlement was made by the bank for the excess collections together with uncollected assigned accounts of P700,000. What is the amount of cash received from the bank in the final settlement?