RECEIVABLE FINANCINGREQUIRED:1. At what amount on the current assets section of the December 31, 2021 statement of financial positionwill the trade notes receivable be carried?2. What amount of loss on notes receivable discounting should be reported in the 2021 statement ofcomprehensive income of the company?3. Based on the ledger account presented, what amount of interest income should be accrued at December31, 2021? During your audit of Russ' Company for the year ended December 31, 2021, you find the following account.Notes ReceivableDateSept 1OctParticularsBrook, 20%, due in 3 monthsBrad Co., 24% due in 2 monthsDiscounted Brook note at 25%Debit80,000Credit1300,000180,000Nov1Beal, 24% due in 13 months600,00030Deni Co., no interest, due in 1 year500,00030Discounted Deni note at 18%500,000Dec1Gafford, 18%, due in 5 months900,000Scott, President, 12% due in 3 months(for cash loan given to Scott)1,200,000All notes are trade notes unless otherwise specified. The Brook note was paid on December 1 as per notificationreceived from the bank. The Brad Co. note was dishonored on the due date but the legal department has assuredmanagement of its full collectability.The company, with your concurrence, will treat the discounting as a conditional sale of notes receivable.

Account receivable is the amount of which is owned from the customer for the credit sales made to…

RECEIVABLE FINANCING REQUIRED: 1. At what amount on the current assets section of the December 31, 2021 statement of financial position will the trade notes receivable be carried? 2. What amount of loss on notes receivable discounting should be reported in the 2021 statement of comprehensive income of the company? 3. Based on the ledger account presented, what amount of interest income should be accrued at December 31, 2021?

RECEIVABLE FINANCING REQUIRED: 1. At what amount on the current assets section of the December 31, 2021 statement of financial position will the trade notes receivable be carried? 2. What amount of loss on notes receivable discounting should be reported in the 2021 statement of comprehensive income of the company? 3. Based on the ledger account presented, what amount of interest income should be accrued at December 31, 2021?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools

Section: Chapter Questions

Problem 30RQSC

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