Solutions
Problem 1
Problem 2.
Problem 3.
Problem 4.
6.
7.
Invoice Price 300,000
Less: Sales Discount
(300,000x2%) 6,000
Collection before freight 294,000
Less: freight paid by buyer 5,000
Total Cash Collection 289,000
8.
Invoice Price 300,000
Less: Sales Discount
(300,000x2%) 6,000
Collection before freight 294,000
Add: freight paid by buyer 5,000
Total Cash Collection 299,000
9.
Invoice Price 300,000
Less: Sales Discount
(300,000x2%) 6,000
Total Cash Collection 294,000
Prob 5
10.
Time Expected Estimated
Outstandin Amount Uncollectibl Uncollecti
g e(%) ble
Under 15
days 300,000 2% 6,000
16-30 days 200,000 10% 20,000
31-45 days 50,000 20% 10,000
46-60 days 30,000 30% 9,000
61-75 days 10,000 35% 3,500
Allowance for Doubtful Accounts 48,500
11.
Accounts Receivable-
end 600,000
Less: ADA- end 48,500
Net realizable Value 551,500
12.
Net Sales ( 2,500,000-150,000) 2,350,000
Multiplied By 3%
Allowance for Doubtful
Accounts- end 70,500
13.
Allowance for Doubtful
Accounts- end 70,500
Allowance for Doubtful
Accounts- beg (25000)
Bad Debt Expense 45,500
14.
Accounts Receivable- end 600,000
Less: ADA- end 70,500
Net realizable Value 529,500
Problem 6.
15.
Accounts Receivable
en 12,250,
3,000,000 d 000
coll 39,500,0
50,000,000 . 00
w.o 1,250,00
. 0
53,000,0
53,000,000 00
16.
Allowance for Doubtful Accounts
en
d 1,500,000 beg 250,000
exp 2,500,0
w.o 1,250,000 . 00
2,750,0
2,750,000 00
Problem 7.
17.
Net Selling Price 350,000
Less: Carrying amount of equipment 300,000
Gain on Sale of Equipment 50,000
18.
Interest Income (₱350,000x12%)= ₱42,000
19.
Noncurrent Portion= 350,000
Problem 8.
20.
Net Selling Price
Present Value of
Principal(200,000x0.69305) 138,610
Add: Present Value of Interest
(200,000x10%x2.36115) 47,223 185,833
Less:Carrying amount of Equipment 150,000
Gain on Sale of Equipment 35,833
21.
Face Value of the Note 200,000
Less: Present value of the Note 185,833
Discount on Note Receivable 14,167
22.
Interes
Discount
Interest t
Amortizat
Collecti Incom Present
ion
Date on e Value
1/1/2018 185,833
12/31/201
8 20,000 24,158 4,158 189,991
12/31/201
9 20,000 24,699 4,699 194,690
12/31/202
0 20,000 25,310 5,310 200,000
Problem 9.
23. Mi 600,000
La 900,000
Notes receivable - trade 1,500,000
24. Principal 80,000
Interest (80,000x20%3/12) 4,000
Maturity Value 84,000
Discount (84,000x20%x2/12) (3,500)
Book Value 80,500
Principal (80,000)
Accrued interest receivable (80,000x20%x1/12) (1,333)
Loss on Discounting of Do Notes 833
Principal 500,000
Discount (500,000x18%) (90,000)
Net Proceeds 410,000
Book Value 500,000
Loss on Discounting of Fa 90,000
Loss on Discounting of Do Notes 833
Loss on Discounting of Fa Notes 90,000
Total Loss 90,833
25. Re (300,000x24%x2/12) 18,000
Mi (600,000x24%x2/12) 24,000
La (900,000x18%x1/12) 13,500
Sol (1,200,000x12%x1/12) 12,000
Total Accrued Interest Receivable 67,500
Problem 10
26. Book Value of Loan Receivable 5,500,000
Present Value of Projected Cash Flows:
12/31/20 (1,750,000x.9091) 1,590,925
12/31/21 (2,000,000x.8064) 1,652,800
12/31/22 (1,750,000x.7513) 1,314,775 4,558,500
Loss on Impairment 941,500
Date
12/31/20 5,500,000 941,500 4,558,500 455,850 1,750,000
12/31/21 3,750,000 585,650 3,264,350 326,435 2,000,000
12/31/22 1,750,000 159,215 1,590,785 159,079 1,750,000
27. Interest Income in 2020 455,850
28. Loan Receivable (5,500,000-1,750,000-2,000,000) 1,750,000
Allowance for Loan Impairment (159,215)
Carrying Value – 12/31/21 1,590,785
29. Interest Income in 2021 326,435
30. Interest Income in 2022 159,079
