For items 9 and 10. An SME sell goods in exchange for a P340,000 note receivable in two years’ time. The cash sale price of the goods is P280,992. The gross profit rate based on cost on the transaction is 30%. Other operating expenses amounted to P50,000. 9. How much is the sale revenue recognized by the SME? a. P340,000 b. P280,992 c. P64,844 d. P334,156 10. How much is the profit or loss of the SME? a. P14,844 b. P(14,844) c. P46,988 d. P42,944

For items 9 and 10. An SME sell goods in exchange for a P340,000 note receivable in two years’ time. The cash sale price of the goods is P280,992. The gross profit rate based on cost on the transaction is 30%. Other operating expenses amounted to P50,000. 9. How much is the sale revenue recognized by the SME? a. P340,000 b. P280,992 c. P64,844 d. P334,156 10. How much is the profit or loss of the SME? a. P14,844 b. P(14,844) c. P46,988 d. P42,944

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

See similar textbooks

Similar questions

Berlin Corp. reported the following data for 2021: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 ADD EXPLANATION THANKS
Here is the following revenue recognition situation.a. Wage Inc. sells goods to Rajab Corp for $850,000, payment due at delivery.b. Wage Inc. sells goods on account to Suro Corp for $1,050,000, payment due in 30 days.c. Wage Inc. sells goods to Syawal Corp for $480,000, payment due on two installments. Thefirst installment payable in 14 months, and the second payment due 4 months later. Thepresent value of the future payment is $445,000.Instructions:Indicate the transaction price for each of these situations and when revenue will be recognized.
On January 1 Year 1, Apple Co. sold goods to Brown Inc. for $250,000 in exchange for a 5-year, zero-interest-bearing note with a face amount of $402,628. The note had an implicit rate of 10 percent. The goods have an inventory cost on Bear’s books of $125,000. What amount of revenue will be recognized on the Year 1 income statement as a result of this transaction?
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 4. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000
Berlin Corp. reported the following data for 2019: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using accrual basis, compute the total income subject to income tax. P1,060,000 P960,000 P1,000,000 P970,000 ADD EXPLANATION THANKS
On December 31, 20X8, the “Receivables” account of Apple Company shows an amortized cost of P1,950,000. Subsidiary details show the following: Trade accounts receivable, P725,000; Trade notes receivable, P100,000; installments receivable, normally due one (1) year to two (2) years, P300,000; Customers’ accounts reporting credit balances arising from sales returns, (P30,000); Advance payments for purchase of merchandise, P150,000; Customers’ accounts reporting credit balances arising from advance payments, (P20,000); Cash advances to subsidiary, P400,000, Claims from insurance company, P15,000; Subscription receivable due in 180 days, P300,000; Accrued rent receivable, P10,000. How much should be presented as “trade and other receivables” under current assets? *
On December 31, 20X8, the “Receivables” account of Apple Company shows an amortized cost of P1,950,000. Subsidiary details show the following: Trade accounts receivable, P725,000; Trade notes receivable, P100,000; installments receivable, normally due one (1) year to two (2) years, P300,000; Customers’ accounts reporting credit balances arising from sales returns, (P30,000); Advance payments for purchase of merchandise, P150,000; Customers’ accounts reporting credit balances arising from advance payments, (P20,000); Cash advances to subsidiary, P400,000, Claims from insurance company, P15,000; Subscription receivable due in 180 days, P300,000; Accrued rent receivable, P10,000. How much should be presented as “trade and other receivables” under current assets? a. P1,600,000 b. P775,000 c. P1,125,000 d. P1,290,000
Sunland Company sold $131000 of goods and accepted the customer's $131000 10%, 1-year note receivable in exchange. Assuming 10% approximates the market rate of return, how much would be reported for the year ending december 31 if sales was made of june 30? $13100. $0 $3275 $6550
Cavite Mall grants its customers one reward point for each P100 sales for the year 2021 only. Each point is redeemable in the form of merchandise and is equivalent to P1. The points accumulate and may be used by the customer as part payment for merchandise purchases in the future. During the year, the total sales amounted to P250,000,000. Fair values of merchandise and the reward points are P247,500,000 and P2,500,000, respectively. By the end of 2021, 50% of the points granted have been redeemed, and it is expected that only 80% of the points granted will be redeemed by the customers. During 2022, Cavite's total sales amounted to P275,000,000 (excluding the additional redemption of 30%) and it revised its estimate of total points expected to be redeemed at 100%. How much is the total revenue to be recognized in 2022?
On July 1, 2020, Marin Inc. made two sales: 1. It sold excess land in exchange for a four-year, non–interest-bearing promissory note in the face amount of $1,165,880. The land’s carrying value is $640,000. 2. It rendered services in exchange for an eight-year promissory note having a face value of $480,000. Interest at a rate of 2% is payable annually. The customers in the above transactions have credit ratings that require them to borrow money at 11% interest. Marin recently had to pay 7% interest for money it borrowed from British Bank. 3. On July 1, 2020, Marin also agreed to accept an instalment note from one of its customers in partial settlement of accounts receivable that were overdue. The note calls for four equal payments of $21,000, including the principal and interest due, on the anniversary of the note. The implied interest rate on this note is 9%. Required: 1. Prepare the journal entries to record the three notes receivable transactions of Marin…
Cornbip Company received from a customer a on-year, $500,000 note bearing annual interest of 8%. After holding the note for four months, Cornbip discounted the note, without recourse, at Bank of Seoul at a discount rate of 10%. At the date of discounting, Cornbip would receive cash of: a. P50,000 b. P540,000 c. P504,000 d. P522,000
Anama Company is a dealer of equipment. On January 1, 2021, the entity sold equipment in exchange for a noninterest-bearing note requiring 5 annual payments of P850,000. The first payment was made on December 31, 2021. The market rate for a similar note was 9%. The entity used 2 decimal places for the PV factor. How much is the carrying amount of the note receivable on December 31, 2021?