Reference no: EM133138396

Question - On December 01, 2017 an entity assigned on a non-notification basis accounts receivable of P5,000.000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity assigned a note for the bank loan. On December 31, 2017, the entity collected assigned accounts of P 2,000,000 less discount of P 200,000. The entity remitted the collections to the bank in partial payment for the loan. The bank applied the first collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of P100,000 on the assigned accounts and wrote off assigned accounts totaling P300,000.

Required -

1. What is the balance of accounts receivable assigned on December 31, 2017?

2. What is the carrying amount of notes payable on December 31, 2017?

3. What is the equity of the assignor in assigned accounts on December 31, 2017?