PROBLEMS PROBLEM 1: TRUE OR FALSE . On Jan. 1, 20x l, Crybaby Co. received a noninterest-bearing e with face amount of P2M and appropriately recognized it at PI,241,843. The note matures in lump sum on Dec. 31, 20x5. The effective interest is 10%. The unamortized discount on Dec. 31, 20x2 is P497,370. 1 Raining Co. receives a 3-year, noninterest-bearing note of P1,000,000. Raining Co. determines that the effective interest rate on the transaction is 10%. The initial carrying amount of the note receivable is computed as: P1,000,000 x PV of 1e10%, n-3. 4. Wet Co. receives a noninterest-bearing note of P3,000,000. The note is collectible in three equal annual installments of P1,000,000, due at the end of each year. Wet Co. determines that the effective interest rate on the transaction is 10%. The initial carrying amount of the note receivable is computed as P1,000,000 x PV of 1 @10%, n-3. 5. Fold Co. receives a 2-year, noninterest-bearing note of P1,200,000 in exchange for the sale of a commodity. If the customer had paid in cash at the sale date, the purchase price would have been P800,000. At initial recognition, Fold Co. records unearned interest of P400,000. 6. Bind Co. receives a 2-year, noninterest-bearing note of P500,000 from the sale of equipment with a cash price of P400,000. The note requires lump sum payment at maturity
PROBLEMS PROBLEM 1: TRUE OR FALSE . On Jan. 1, 20x l, Crybaby Co. received a noninterest-bearing e with face amount of P2M and appropriately recognized it at PI,241,843. The note matures in lump sum on Dec. 31, 20x5. The effective interest is 10%. The unamortized discount on Dec. 31, 20x2 is P497,370. 1 Raining Co. receives a 3-year, noninterest-bearing note of P1,000,000. Raining Co. determines that the effective interest rate on the transaction is 10%. The initial carrying amount of the note receivable is computed as: P1,000,000 x PV of 1e10%, n-3. 4. Wet Co. receives a noninterest-bearing note of P3,000,000. The note is collectible in three equal annual installments of P1,000,000, due at the end of each year. Wet Co. determines that the effective interest rate on the transaction is 10%. The initial carrying amount of the note receivable is computed as P1,000,000 x PV of 1 @10%, n-3. 5. Fold Co. receives a 2-year, noninterest-bearing note of P1,200,000 in exchange for the sale of a commodity. If the customer had paid in cash at the sale date, the purchase price would have been P800,000. At initial recognition, Fold Co. records unearned interest of P400,000. 6. Bind Co. receives a 2-year, noninterest-bearing note of P500,000 from the sale of equipment with a cash price of P400,000. The note requires lump sum payment at maturity
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 79E
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:interest income.
PROBLEMS
PROBLEM 1: TRUE OR FALSE
On Jan. 1, 20xl, Crybaby Co. received a noninterest-bearing
cote with face amount of P2M and appropriately recognized it
at PL.241,843. The note matures in lump sum on Dec. 31, 20x5.
The effective interest is 10%. The unamortized discount on
Dec. 31, 20x2 is P497,370.
1 Raining Co. receives a 3-year, noninterest-bearing note of
P1,000,000. Raining Co. determines that the effective interest
rate on the transaction is 10%. The initial carrying amount of
the note receivable is computed as: P1,000,000 x PV of 1 e10%, n-3.
4. Wet Co. receives a noninterest-bearing note of P3,000,000. The
note is collectible in three equal annual installments of
P1,000,000, due at the end of each year. Wet Co. determines
that the effective interest rate on the transaction is 10%. The
initial carrying amount of the note receivable is computed as
P1,000,000 x PV of 1 @10%, n-3.
5. Fold Co. receives a 2-year, noninterest-bearing note of
P1,200,000 in exchange for the sale of a commodity. If the
customer had paid in cash at the sale date, the purchase price
would have been P800,000. At initial recognition, Fold Co.
records unearned interest of P400,000.
6. Bind Co. receives a 2-year, noninterest-bearing note of
P500,000 from the sale of equipment with a cash price of
P400,000. The note requires lump sum payment at maturity
2022.04.19 16:38
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