On October 31, 2022, BB Company discounted at the bank a customer’s P600,000 interest-bearing note, 6-month, 12% note, dated July 1, 2020 with recourse. The bank discounted the note at 10%. How much is the gain or loss should the company recognize as a result of discounting the notes receivable?
Q: Assume that Leno uses cost-plus pricing, setting the selling price 22% above its costs. What would b...
A: In cost plus pricing, the selling price is determined by marking up the cost by the desired
Q: Company had a net income after tax of P3,500,000 for the year ended December 31, 2021 after giving e...
A: Solution Concept Income from discontinued operation shall be presented as a separate line item in th...
Q: Require (a): Your business issued a 14%, $300,000, one-year, note payable on April 1, 20x1. Both the...
A: Formula: Interest Amount = Notes amount x Interest rate x Time period
Q: In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Cla...
A: Construction Contract: An agreement for construction reflects, according to the General Conditions o...
Q: 1. Mr. Musfiq is a Chartered Accountant (CA). He started a new consultancy firm on July 1,2021. Duri...
A: Date Particulars Dr. $ Cr $ 01 July 2021 Cash dr 550000 to Musfiq capital 55...
Q: MERGER ANALY SIS Smitty’s Home Repair Company, a regional hardware chain that specializes in doit-yo...
A: Merger: A merger is the mix of two organizations into one by either shutting the old entities into...
Q: Shown below and on the next page are account balances found in the ledger of Humility Corporation at...
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for y...
Q: ed this month 18,000 Total units completed and transferred out 14,800 Required: 1. Explain two proce...
A: There are Two method used in process costing which as follows 1. Weighted Average Method :- ...
Q: Which of the following statements is/are not related to the Bretton Woods Agreement? I. Bretton Wood...
A: Establishment of Bretton Woods Agreement: The Bretton Woods Agreement has created to establish Inter...
Q: Mr. and Mrs. Reyes are married individuals, Mr Reyes receives an annual taxable income of 365,000 wh...
A: As per the provision in Philippines following ax slabs is applicable No Income tax if income is upt...
Q: Adriana Gonzalez and Sylvester Van Horne formed a partnership, dividing income as follows: 1. Annual...
A: The correct solution for the above mentioned question is given in the following steps for your refer...
Q: Tamarisk, Inc., opened an incorporated dental practice on January 1, 2022. During the first month of...
A: The journal entry of above transaction are as follows
Q: Which of the tollowing methods can be used to estimate the amount of variable consideration? 1Expec...
A: As per Accounting standard on Revenue recognition ASC 606 for determining the amount of variable con...
Q: At the end of the 2021 year, the accounting staff at Prestige Design Flooring Inc. (PDF) have the fo...
A: A balance sheet is a representation of an individual's personal or corporation's financial balances ...
Q: Prepare a Trial Balance for January 31, 2022. As a note: As a self check, your Trial Balance (Inst...
A: Trial Balance The purpose of preparing the trial balance is to which is useful in the preparation of...
Q: Please read the directive and questions carefully and answer the questions as follows. Use the corre...
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...
Q: Everlast Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentag...
A: Since you have specifically asked for part c and d, so we have answered the same for you.
Q: CompuWorld sells two products, R66 and R100, and calculates sales variances using the contribution m...
A: Sales quantity variance = (actual sales quantity- budgeted sales quantity) x budgeted contribution
Q: Statement : Non-cash contributions of the partners should be recorded at agreed value in the absence...
A: Generally, associate interest coverage magnitude relation of a minimum of 2 (2) is taken into accoun...
Q: Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated paym...
A: The determination of estimated recovery percentage and estimated payment to partially secured credit...
Q: a. Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning balances, a...
A: Depreciation is the amount of expense which is recorded on the income statement of the company which...
Q: On February 28, 2022, Aris and Yang formed a partnership. The partners agreed to invest equal amount...
A: Partnership- A partnership is a type of business that is formed by the mutual consent of several peo...
Q: ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The to...
A: The balance of accounts receivable as on December 31, 2022 will be the difference between Billings d...
Q: Require (a): Your business issued a 14%, $300,000, one-year, note payable on April 1, 20x1. Both the...
A: Solution A journal is the company's official book in which all business transactions are recorded on...
Q: ABC. Inc. works on a P5,250,000 contract in 2022 to construct an office building. During 2022, ABC I...
A: In Construction project revenue shall be recognized on the basis of precentage of work completion.
Q: June 10th Wrote off the balance of $600 from Manny Miller’s account as uncollectible September ...
A: Allowance for uncollectable account Solution 1- Date Particular Amount DR Amount CR ...
Q: The Corrigan Corporation’s 2015 and 2016 financial statements follow,along with some industry averag...
A: Solution Accounting Ratios are a group of metrics used to measure the efficiency and profitability o...
Q: estimated that 10% of the sales amount received from customers would relate to the gift set to be aw...
A: The company is selling their main products along with a coupon code. A Customer needs to send a cheq...
Q: True/False 1. Exclusions are the amounts, which the law allows to be deducted from gross income in...
A: The basic meaning of exclusion is the amount of income which do not form part of Gross Income wherea...
Q: Campbell Services Company has 70 employees, 21 of whom are assigned to Division A and 49 to Division...
A: Here, Fringe benefits cost = $ 433,300 Number of employee in division A = 21 employee Number of emp...
Q: The E.N.D. partnership has the following capital balances as of the end of the current year: ...
A: The partnership comes into existence when two or more persons agree to do the business and further s...
Q: Which of the following is not a typical example of an accrued expense? Wages Taxes Depreciation Inte...
A: Accrued expenses are considered as current liabilities in books of accounts. These are the obligatio...
Q: On January 1, 2020, Bloody Red Company issued to its chief executive officer share options for the p...
A: Share options are options or rights being provided to the employees so that they can purchase shares...
Q: during 2022, P23,000 Accounts receivable at 12/31/22, P375,000 Uncollectible accounts recovered du...
A: Allowance for uncollectible accounts is an estimate of the uncollectible for accounts receivable . ...
Q: oWing information applies to the questions displayed below.] Illinois Metallurgy Corporation has two...
A: Note: As per general rule, in the case of sufficient capacity available, the minimum transfer price ...
Q: On January 1, 2022. AA Company sold an equipment costing P5,000,000 and accumulated depreciation of ...
A: Interest Income is the income which is generated by the investing assets. In general the interest in...
Q: The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on Ma...
A: T-Account Purpose of preparing the T-Account is to know the actual balance which are involved at the...
Q: Which one of these statements about the accrual-basis of accounting is false? This basis is in accor...
A: Cash basis of accounting recognize the expenses or revenues when they are paid or received. Accrual ...
Q: & dilfferential analysis report for the make-or-buy decision, considering the differential revenues ...
A: Cost increase from purchasing outside layout services : = Total differential costs - Total Cost to p...
Q: INNOVATION ELECTRONICS, INC. Statement of Cash Flows For the Year Ended December 31, 20X2 Cash Flows...
A: Cash Flow Statement - The Cash Flow Statement is the statement that shows the cash inflow and outflo...
Q: ABC Company filed for liquidation with the Philippine Securities and Exchange Commission. Its latest...
A: 1) computation of non-cash current assets: Carrying amount of the non-cash current assets = 75% of t...
Q: On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a co...
A: Fixed Price Contract is the contract where two parties agree for a fixed price for the agreement. To...
Q: The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on Ma...
A: Solution Working note Adjusted trial balance Debit Credit Cash 2263 Supplies...
Q: Office salaries 311,000 Office supplies used 70,800 Prepaid expenses 49,800 Purchases 2,424,180 Purc...
A: Assets and liabilities sre integral parts of financial statements of an entity and show the financia...
Q: Dear Bartleby, Could you please provide some assistance on the listed question, thank you. Refer to...
A: Financial statements are the set of records of the financial transactions and position of a business...
Q: The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour...
A: The correct solution for the above mentioned question is given in the following steps for your refer...
Q: Note: To complete the assignment, go to the worksheet tab labeled Cash Flow and complete the stateme...
A: The cash flow statement assesses a corporation's ability to handle its cash balance, or how efficien...
Q: The following are excluded from gross income, except: a. Proceeds of life insurance policy received...
A: Gross Income Gross income refers to the income of an individual which comprises income from wages an...
Q: Required: Calculate the amount of gift tax due this year and Casey's unused exemption equiva (Refer ...
A: The answer is stated below:
Q: The Fly Company provides advertising services for clients across the nation. The Fly Company is pres...
A: Working note: Computation of cost of service of Vault bank and Takeoff airlines:
26
On October 31, 2022, BB Company discounted at the bank a customer’s P600,000 interest-bearing note, 6-month, 12% note, dated July 1, 2020 with recourse. The bank discounted the note at 10%.
How much is the gain or loss should the company recognize as a result of discounting the notes receivable?
Step by step
Solved in 2 steps
- Element Surfboards issued a $210,800 note on January 1, 2018 to a customer, Leona Marland, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10.2% annual interest rate. Leona Marland does not pay on her account and dishonors the note. On December 2, 2018, Element Surfboards decides to sell the dishonored note to a collection agency for 30% of its value. Record the journal entries for Element Surfboards for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on October 1, 2018 C. Receivable sale on December 2, 2018On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed the following information relating to its receivables: The company has a recourse liability of 700 related to a note receivable sold to a bank. During 2019, credit sales (terms, n/EOM) totaled 2,200,000, and collections on accounts receivable (unassigned) amounted to 1,900,000. Uncollectible accounts totaling 18,000 from several customers were written off, and a 1,350 accounts receivable previously written off was collected. Additionally, the following transactions relating to Blackmons receivables occurred during the year: On December 31, 2019, an aging of the accounts receivable balance indicated the following: Required: 1. Prepare the journal entries to record the preceding receivable transactions during 2019 and the necessary adjusting entry on December 31, 2019. Assume a 360-day year for interest calculations and round calculations to the nearest dollar. 2. Prepare the receivables portion of Blackmons December 31, 2019, balance sheet. 3. Next Level Compute Blackmons accounts receivable turnover in days, assuming a 360-day business year. What is your evaluation of its collection policies? 4. If Blackmon uses IFRS, what might be the heading of the section for the receivables reported in Requirement 2?
- On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?Interest-Bearing and Non-Interest-Bearing Notes On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a 12,000,60-day note. Required: Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customers repayment on February 9, 2020, assuming: 1. Interest of 12% was in addition to the face value of the note. 2. The note was issued as a 12,000 non-interest-bearing note with a present value of 11,765. The implicit interest rate on the note receivable was 12%. Assume a 360-day year. (Round to the nearest dollar.)
- Mystic Magic issued a $120,250 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 9.6% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 25% of its value. Record the journal entries for Mystic Magic for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on October 1, 2018 C. Receivable sale on November 10, 2018Notes Payable and Effective Interest On November 1,2019, Edwin Inc. borrowed cash and signed a 60,000, 1-year note payable. Required: Compute the following items assuming (a) an interest-bearing note at 12%, (b) a non-interest-bearing note discounted at 12%: cash received effective interest rate interest expense for 2019 Prepare the journal entries for Edwin under each case for 2019 and 2020. Next Level Why is the effective rate higher for the non-interest-bearing note?Comprehensive Notes Receivable On January 1, 2019, Seaver Company sold land with a book value of 23,000 to Bench Company. Bench paid 15,000 down and signed a 15,000 non-interest-bearing note, payable in two 7,500 annual installments on December 31, 2019, and 2020. Neither the fair value of the land nor of the note is determinable. Benchs incremental borrowing rate is 12%. Later in the year, on July 1, 2019, Seaver sold a building to Hane Company, accepting a 2-year, 100,000 non-interest-bearing note due July 1, 2021. The fair value of the building was 82,644.00 on the date of the sale. The building had been purchased at a cost of 90,000 on January 1, 2014, and had a book value of 67,500 on December 31, 2018. It was being depreciated on a straight-line basis (no residual value) over a 20-year life. Required: 1. Prepare all the journal entries on Seavers books for January 1, 2019, through December 31, 2020, in regard to the Bench note. 2. Prepare all the journal entries on Seavers books for July 1, 2019, through July 1, 2021, in regard to the Hane note. 3. Prepare the notes receivable portion of Seavers balance sheet on December 31, 2019 and 2020.
- Proceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of 150,000. A. Determine the proceeds of the note, assuming the note carries an interest rate of 10%. B. Determine the proceeds of the note, assuming the note is discounted at 10%.Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had a carrying value on Pitts books of 10,000. Chatham gave Pitt a 60,000, non-interest-bearing note payable in five equal annual installments of 12,000 with the first payment due and paid on January 1, 2020. There was no established price for the patent, and the note has no ready market value. The prevailing rate of interest for a note of this type at January 1, 2019, is 12%. Required: 1. Prepare a schedule showing the income or loss before income taxes that Pitt should record for the years ended December 31, 2019 and 2020. Show supporting computations in good form. 2. Next Level If Pitt inadvertently failed to discount the note and instead recorded it at its gross value, what would be the effect on income or loss before income taxes for the year ended December 31, 2019?On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
