Zeus Company sold P6,000,000 of accounts receivable to a finance entity. Control was surrendered by Zeus Company. The factor charged 15% commission on all accounts receivable factored and withheld 10% of accounts factored as protection against customer returns and other adjustments. Zeus company previously established an allowance for doubtful accounts of P200,000 for these accounts. By the year end the entity had collected the factor's holdback there being no customer returns and other adjustments.

Required:

1. What amount of cash was initially received from factoring?

2. What is the loss on factoring?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Problem 2 1 Cas initially receiv... View the full answer