Transcribed Image Text: was surrendered by Zeus Company. Problem 8-17 (AICPA Adapted) Zeus Company factored P6,000,000 of accounts receivable to a finance entity at the beginning of current year. Control

Transcribed Image Text: was surrendered by Zeus Company.
Problem 8-17 (AICPA Adapted)
Zeus Company factored P6,000,000 of accounts receivable to
a finance entity at the beginning of current year. Control
The factor accepted the accounts receivable subject to
recourse for nonpayment. The fair value of the recourse
obligation is P100,000.
The factor assessed a fee of 3% and retained a holdback equal
to 5% of the accounts receivable.
In addition, the factor charged 15% interest computed on á
weighted average time to maturity of the accounts receivable
of 54 days.
3. If all accounts are not collected, what is the loss on
factoring?
a. 713,150
b. 100,000
c. 413,150
d. 313,150
с.

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