The below information is the same as the previous question.On January 1, 20X1, a company financed the sale of equipment and recorded a note receivable for the sale. The accountant inappropriatelyrecorded the sale at the face value and coupon rate in the below income statement.Notes receivable (Face value)Tax rate430,00030%Note receivable information:Term of the noteCoupon rateMarket rate8 years1.2%5.6%The note is due in equal annual payments of principie and interest.Incorrect income statement, for the year ended December 31, 20X1$1,832,2005,160826,300657 BO0353.260105.978SalesInterest revenueCost of goods soldExpensesPretax incomeТах еxpense$247.282Net incomeWhat is correct amount of sales that should be reported on the income statement?

Calculation of amount of sale reported are as follows.

The below information is the same as the previous question. On January 1, 20X1, a company financed the sale of equipment and recorded a note receivable for the sale. The accountant inappropriate recorded the sale at the face value and coupon rate in the below income statement. Notes receivable (Face value) Tax rate 430,000 30% Note receivable information: Term of the note 8 years 1.2% Coupon rate Market rate 5.6% The note is due in equal annual payments of principle and interest. Incorrect income statement, for the year ended December 31, 20X1 Sales $1,832,200 5,160 826,300 657 B00 353.260 Interest revenue Cost of goods sold Expenses Pretax income 105.978 Tax expense

The below information is the same as the previous question. On January 1, 20X1, a company financed the sale of equipment and recorded a note receivable for the sale. The accountant inappropriate recorded the sale at the face value and coupon rate in the below income statement. Notes receivable (Face value) Tax rate 430,000 30% Note receivable information: Term of the note 8 years 1.2% Coupon rate Market rate 5.6% The note is due in equal annual payments of principle and interest. Incorrect income statement, for the year ended December 31, 20X1 Sales $1,832,200 5,160 826,300 657 B00 353.260 Interest revenue Cost of goods sold Expenses Pretax income 105.978 Tax expense

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 94.1C

See similar textbooks

Similar questions

Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
Ink Records recorded $2,333,898 in credit sales for the year and $1,466,990 in accounts receivable. The uncollectible percentage is 3% for the income statement method and 5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $20,254; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,888; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
On January 1, Gabriel Company sold land with a carrying value of P1,000,000 in exchange for a 1-year, 8% note with a face value of P1,500,000. The 8% rate properly reflects the time value of money for this type of note.On March 1, Gabriel Company discounted the note with recourse and accounted as a conditional sale. The bank discount rate is 10%.On September 1, the maker dishonored the notes receivable. In return, Gabriel Company pays the factor the maturity value of the note plus a protest fee of P5,000.At the end of the year, Gabriel Company collected the dishonored note in full plus a 10% interest on the total amount due.Requirements:1. Prepare the necessary journal entry to record the above transactions.2. Assuming that the March 1 transaction did not happen, prepare the necessary journal entry to record the above transactions.
In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of P6,000,000. On the note’s due date, December 31, 2X21, Land owed P480,000 of accrued interest and P6,000,000 on the note. Land was in financial difficulty and was unable to make any payments. To solve the problem, Land and the bank agreed to amend the note as follows: • Extended the maturity to December 31, 2X23. • The P480,000 interest due on December 31, 2X21 was forgiven. • Land Corporation would be required to make an annual interest payment of P540,000 every December 31 starting 2X22. • Transaction cost incurred that is directly related to the debt restructuring was P16,850. As of December 31, 2X21, the yield rate based on the restructured debt and after considering the amount of transaction cost is 6.24%. 5. What type of debt restructuring is being described by the case? 6. What is the total gain from restructuring? 7. What amount should Land Corporation report…
In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of P6,000,000. On the note’s due date, December 31, 2X21, Land owed P480,000 of accrued interest and P6,000,000 on the note. Land was in financial difficulty and was unable to make any payments. To solve the problem, Land and the bank agreed to amend the note as follows: • Extended the maturity to December 31, 2X23. • The P480,000 interest due on December 31, 2X21 was forgiven. • Land Corporation would be required to make an annual interest payment of P540,000 every December 31 starting 2X22. • Transaction cost incurred that is directly related to the debt restructuring was P16,850. As of December 31, 2X21, the yield rate based on the restructured debt and after considering the amount of transaction cost is 6.24%. 8. What is the carrying amount of the obligation that should be reported in 2X22 statement of financial position? 9. Provide the journal entry for debt…
In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of P6,000,000. On the note’s due date, December 31, 2X21, Land owed P480,000 of accrued interest and P6,000,000 on the note. Land was in financial difficulty and was unable to make any payments. To solve the problem, Land and the bank agreed to amend the note as follows: • Extended the maturity to December 31, 2X23. • The P480,000 interest due on December 31, 2X21 was forgiven. • Land Corporation would be required to make an annual interest payment of P540,000 every December 31 starting 2X22. • Transaction cost incurred that is directly related to the debt restructuring was P16,850. As of December 31, 2X21, the yield rate based on the restructured debt and after considering the amount of transaction cost is 6.24%. 5. What type of debt restructuring is being described by the case? 6. What is the total gain from restructuring? 7. What amount should Land Corporation report…
On February 1, 2021, MARIGOLD Company factored receivables with a carrying amount of ₱300,000 to SUNFLOWER Company. SUNFLOWER Company assesses a finance charge of 3% of the receivables and retains 5% of the receivable for possible sales returns. Relative to this transaction, you are to determine the amount of loss on sale or factoring to be reported in the income statement of MARIGOLD Company for February. Assume that MARIGOLD factors the receivables on a without recourse basis. The loss to be reported is?
On February 1, 2021, MARIGOLD Company factored receivables with a carrying amount of ₱300,000 to SUNFLOWER Company. SUNFLOWER Company assesses a finance charge of 3% of the receivables and retains 5% of the receivable for possible sales returns. Relative to this transaction, you are to determine the amount of loss on sale or factoring to be reported in the income statement of MARIGOLD Company for February. Assume that MARIGOLD factors the receivables on a without recourse basis. 1. The loss to be reported is?* ₱ 24,000 ₱ 15,000 ₱ -0- ₱ 9,000 2. The amount of cash initially to be received is? * ₱ 291,000 ₱ 285,000 ₱ 300,000 ₱ 276,000 Present the solutions.
On February 1, 2021, MARIGOLD Company factored receivables with a carrying amount of ₱300,000 to SUNFLOWER Company. SUNFLOWER Company assesses a finance charge of 3% of the receivables and retains 5% of the receivable for possible sales returns. Relative to this transaction, you are to determine the amount of loss on sale or factoring to be reported in the income statement of MARIGOLD Company for February. Assume that MARIGOLD factors the receivables on a without recourse basis. The loss to be reported is? ₱ 15,000 ₱ -0- ₱ 9,000 ₱ 24,000