4.ABC Co received from a customer a 3-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 10% and collectible in 3 equal annual installments beginning Dec 31, 20X1. PV of P1 at 10% for 3n= .75131 PV of an ordinary annuity P1 at 10% for 3n =2.48685 The carrying value of the note at Jan 1, 20X2 would be: 120,000 99,474 80,000 69,421

4.ABC Co received from a customer a 3-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 10% and collectible in 3 equal annual installments beginning Dec 31, 20X1. PV of P1 at 10% for 3n= .75131 PV of an ordinary annuity P1 at 10% for 3n =2.48685 The carrying value of the note at Jan 1, 20X2 would be: 120,000 99,474 80,000 69,421

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 27E

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3.ABC Co received from a customer a 3-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 10% and collectible in 3 equal annual installments beginning Dec 31, 20X1. PV of P1 at 10% for 3n= .75131 PV of an ordinary annuity P1 at 10% for 3n =2.48685The entry to record the receipt of the note would include: Cr Sales 120,000 Cr Notes Receivable 120,000 Dr Notes Receivable 90,157 Cr Unearned interest income 20,526
On Jan 1, 20X1, ABC Corp received a P300,000 3-year note from a customer. The principal and interest of the note is collectible annually starting Dec 31, 20X1. Effective interest rate is 10% . How is the value of the note at December 31, 20X1? PV of P1 at 10% for 3n = .75131 PV of ordinary annuity of P1 at 10% for 3n = 2.48685 248,685 200,000 173,553 100,000
ABC Co. receives P210,000 3-year non-interest bearing note. Collections is on the principal and interest is to be made every 12 months. Effective rate was 12%. How will ABC measure the note on initial recognition? 210,000 X PV of P1 at 12% for 3n 70,000 X PV of ordinary annuity at 12% for 3n 210,000 X PV of ordinary annuity at 12% for 3n 70,000 X PV of P1 at 12% for 3n
12.ABC Co received from a customer a 5-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 12% and due on Dec 31, 20X5. PV of P1 at 12% for 5n = .56743 PV of an ordinary annuity of P1 at 12% for 5n = 3.60478The note would be initially recorded on Jan 1, 20X1 at: 120,000 86,515 68,092
ABC Co received from a customer a 5-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 12% and due on Dec 31, 20X5. PV of P1 at 12% for 5n = .56743 PV of an ordinary annuity of P1 at 12% for 5n = 3.60478The note would be initially recorded on Jan 1, 20X1 at: a. 120,000 b. 86,515 c. 68,092
On Jan 1, 20X1, ABC Corp received a P300,000 3-year note from a customer. The principal and interest of the note is collectible on Jan 1, 20X4. Effective interest rate is 10% . How is the interest income at Dec 31, 20X1? PV of P1 at 10% for 3n = .75131 PV of ordinary annuity of P1 at 10% for 3n = 2.48685 7,461 22,539 24,868 30,000
On Jan 1, 20X1, ABC Corp received a P450,000 3-year note from a customer. The principal and interest of the note is collectible in 3 equal payments starting on Jan 1, 20X2. Effective interest rate is 10% . How much is unearned interest income at Jan 1, 20X1? PV of P1 at 10% for 3n = .75131 PV of ordinary annuity of P1 at 10% for 3n = 2.48685 338,090 373,028 111,910 76,972
32. On April 1, 20x1, ABC received a P1,500,000, 10%, 3-year note receivable in exchange for a vacant lot in the books at P850,000. Principal in 3 equal installments, plus interest are due annually starting April 1, 20x2. Current market rates as of April 1, 20x1, December 31, 20x1, and December 31, 20x2 are 10%, 12% and 13%, respectively. If ABC reports every December 31, determine the total income ABC shall report on 2021. The correct answer is: 762,500
On Jan 1, 20X1, ABC Corp received a P450,000 3-year note from a customer. The principal and interest of the note is collectible on Jan 1, 20X4. Effective interest rate is 10% . How much is value of the note at Jan 1, 20X1? PV of P1 at 10% for 3n = .75131 PV of ordinary annuity of P1 at 10% for 3n = 2.48685 338,090 373,028 111,910 76,972
On December 31, 20x1, DEF Company purchased a machine in exchange for a non-interest bearing note requiring eight payments of ₱200,000.The first payment was made on December 31, 20x1 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note was 12%. PV of an ordinary annuity of 1 at 12% for 8 periods 4.968PV of an annuity of 1 in advance at 12% for 8 periods 5.564 Required:1.What is the carrying amount of note payable on December 31, 20x2?
On December 31, 20x1, DEF Company purchased a machine in exchange for a non-interest bearing note requiring eight payments of ₱200,000.The first payment was made on December 31, 20x1 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note was 12%. PV of an ordinary annuity of 1 at 12% for 8 periods 4.968PV of an annuity of 1 in advance at 12% for 8 periods 5.564 Required:1. What amount should be recorded as initial cost of the machine?2. What is the discount on note payable on December 31, 20x1?3. What amount should be reported as interest expense for 20x2?4. What is the carrying amount of note payable on December 31, 20x2?
On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-interest bearing note requiring ten annual payments of P10,000. DEF made the first payment on December 30, Year 1. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows: For 9 periods, the present value of P1 at 8% is 0.50 while the present value of ordinary annuity of P1 at 8% is 6.71. In its December 31, year 1 Balance sheet, what amount should ABC Corporation report as notes receivable?