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Subject Topic: FAR Current Assets Servicing Assets (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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rrajan
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Joined: 14 Oct 2009
Location: Canada
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Posts: 34
Posted: 15 Oct 2009 at 06:37 | IP Logged  

Can somebody help to explain the following
Weily FAR 2009 edition Page 283 Interests that continue to be held

Facts Given
Receivable's Fair value - 16,500
Receivable's book value - 15,000
Servicing asset - 700
Seller sells 80% of receivables

Journal entry
Cash Dr. - 13200
Servicing assets Dr.  - 480
Receivables  Cr.- 12,000
Gain Cr. - 1,680

My doubt is how they arrive 480 and how bookvalue 0f 80% allocated between receivables sold and servicing asset?

Thanks in advance
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