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The document discusses three financial transactions: 1) AIG Inc assigned $2,000,000 in accounts receivable to a bank, which loaned 50% less 4% of the amount. AIG received partial payments in July and August and there was a final settlement. 2) ABC Co discounted an $800,000 customer note to a bank at 16% on a recourse basis. The customer defaulted at maturity so ABC was charged. 3) ABC Co discounted its own $200,000 note to a bank at 10% for one year and received net proceeds.

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Angela Ricaplaza Reveral
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238 views2 pages

13

The document discusses three financial transactions: 1) AIG Inc assigned $2,000,000 in accounts receivable to a bank, which loaned 50% less 4% of the amount. AIG received partial payments in July and August and there was a final settlement. 2) ABC Co discounted an $800,000 customer note to a bank at 16% on a recourse basis. The customer defaulted at maturity so ABC was charged. 3) ABC Co discounted its own $200,000 note to a bank at 10% for one year and received net proceeds.

Uploaded by

Angela Ricaplaza Reveral
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

13. 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?

14. On July 1, 20x1, ABC Co. discounted an ₱800,000, 90-day, 12% note, received from a
customer on June 1, 20x1, with a bank at 16% on with recourse basis. The discounting is
treated as conditional sale. The bank uses 365 days per year in computing for discounts. On
August 30, 20x1 (maturity date), the maker of the note defaulted and the bank charged ABC
Co. the maturity value of the note plus a ₱3,000 protest fee. How much is transferred to
accounts receivable due to the dishonor and before impairment testing?

15. On July 1, 20x1, ABC Co. discounted its own note of ₱200,000 to a bank at 10% for one
year.
How much was the net proceeds received by ABC from the transaction? 

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