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help me to answer this with solution thank you! 3. Burr Company had the following account balance at December 31, 2019: Cash in bank 2,250,000
help me to answer this with solution thank you!
3. Burr Company had the following account balance at December 31, 2019: Cash in bank 2,250,000 Cash on hand 125,000 Cash legally restricted for additions to plant (expected to be disbursed in 2020) 1,600,000 Cash in bank includes P600,000 of compensating balance against short-term borrowing arrangement. The compensating balance is not legally restricted as to withdrawal by Burr. In the current assets section of Burr's December 31, 2019 balance sheet, total cash should be reported at a. 1,775,000 c. 2.375,000 b. 2,250,000 d. 3,975,000 XYZ Company factored P6,000,000 of accounts receivable to ABC Company on October 1, 2006. Control was surrendered by XYZ. ABC accepted the receivables subject to recourse for nonpayment. ABC assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, ABC charged 15% interest computed on a weighted average time to maturity of the receivables of 54 days. The fair value of the recourse obligation is P90,000. 4. XYZ will receive and record cash of a. 5,296,850 c. 5,476,850 b. 5,386,850 d. 5,556,850 5. Assuming all receivables are collected, XYZ Company's cost of factoring the receivables would a. 313,150 b. 180,000 c. 433,150 d. 613,150Step by Step Solution
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