Practice Set 1 AR AFDA NR NR-D
Beg. Bal. 672,000 42,300 179,400 114,000
Sales on credit 2,623,800
Collection of AR (2,523,000)
Write off (41,400) (41,400)
notes collected (87,000)
customer notes received (216,000) 216,000
NR discounted were paid 108,000 (108,000)
NR discounted defaulted 6,075 (6,000) (6,000)
Proceeds from notes disc. 135,000
Collection on accounts 1,500
previsouly written off
Sales return and allowances (6,000)
Bad debts of credit sales 39,357
Total 515,475 41,757 410,400 135,000
Practice Set 2
1. Required Allowance
Age of categories AR Uncollectible
1 to 10 days 1,920,000 19,200
11 to 30 days 540,000 13,500
Past due 31 to 60 days 240,000 12,000
Past due 61 to 120 days 150,000 30,000
Past due 121 to 180 days 90,000 31,500
Past due over 180 days 60,000 48,000
Total 3,000,000 154,200
2. Year-end adjustment - Allowance for doubtful accounts by aging
Allowance for bad debts, beg. 54,600
Bad debts expense 640,000
Total 694,600
Write off (585,000)
AFBD, unadjusted 109,600
Allowance for bad debts 154,200
Adjustment 44,600
Bad debts expense 44,600
Allowance for bad debts 44,600
3. Net realizable value - Accounts Receivable Dec. 31,2014
Accounts Receivable 3,000,000
Less: Allowance for bad debts (154,200)
Net Realizable Value 2,845,800
4. Bad debt expense
Bad debt expense 640,000
Required bad debts 44,600
Total 684,600
5. Total credit sales 16,000,000
Practice Set 3
Prob 1
a.)
Present value = Selling price 142,356
Book value (160,000)
Loss on sale of equipment (17,644)
b.)
Book value = Face value 200,000
Present value or selling price (142,356)
Discount on notes receivable 57,644
c.) Present value Interest income 142,356
142,356 17,083 159,439
159,439 19,133 178,572
178,572 21,428 200,000
Prob 2
Net present value of note 1,076,847
Cost of land (800,000)
Gain on sale of land 276,847
Net present value of note 1,076,847
Interest 10%
Interest Income 107,685
Prob 3
Maturity value = PxRxT
Less: Bank discount
Net proceeds
Maturity value 150
Bank discount (122)
Net proceeds 28
Net proceeds 10,028
Face value 100,000
Bank discount (2,000)
Net proceeds 98,000
Practice Set 4
1.)
Current portion 1,000,000
Noncurrent portion 1,000,000
Interest income 270,000
Accrued Interest Receivable - 2014 90,000
2.)
NR from officer - noncurrent 800,000
Interest income 80,000
3.)
Present value - Notes receivable 318,800
Interest income 28,692
NR from sale of equipment - NC 347,492
Non interest bearing note
Face value 400,000
Present Value of note w/o interest (318,800)
Discount on NR 81,200
Interest income (28,692)
Unamortized discount on NR 52,508
4.)
Annual payments 451,250
Interest (154,000)
297,250
1,400,000
Current portion - annual pay (297,250)
Noncurrent portion - Annual pay 1,102,750
Accrued interest 77,000
1. Noncurrent receivables 3,250,242
2. Current portion of NR 1,297,250
3. Accrued interest receivable 257,000
4. Unamortized discount 52,508
5. Total interest income 455,692
Accounts Receivable Inventories Sales Cost of Sale
Beg. 276,500 425,000 1,320,000 842,000
FOB Destination (8,680) 7,240 (8,680) (7,240)
Shipped to consignee (14,200) 12,500 (14,200) (12,500)
FOB Destination (10,000) (10,000)
FOB Shipping Point (6,100) 6,100
Shipped to consignee (14,000) (14,000)
FOB Shipping Point 21,000 (18,200) 21,000 18,200
Total 250,620 420,440 1,294,120 846,560
1. Notes Receivable - trade
Valerie, due in 13 months 600,000
Tictic, due in 5 months 900,000
Total 1,500,000
2. Loss on notes receivable
Cornea, due in 3 months Cellular Co, due in one year
Maturity value: 80,000 + (80,000*.2*(3/12)) 84,000 Maturity value
Discount: 84,000*.25*(2/12) (3,500) Discount: 500,000*0.18
Net proceeds 80,500 Net proceeds
Book value
Principal 80,000 Loss on discounting
Accrued interest receivable
80,000*.20*(1/12) 1,333
Book value (81,333)
Loss on notes receivable discounting (833)
Total Loss on notes receivable discounting (90,833)
3. Accrued Interest
Hunk: 300,000*.24*3/12 18,000
Valerie: 600,000*.24*2/12 24,000
Ticitc: 900,000*.18*1/12 13,500
O. Reyes: 1,200,000*.12*1/12 12,000
Total 67,500
, due in one year
500,000
500,000*0.18 (90,000)
410,000
(500,000)
(90,000)
