2014 Vol 1 Ch 3 Answers
March 29, 2017 | Author: Simoun Torres | Category: N/A
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CHAPTER 3 - RECEIVABLES 3-1. a. b. c.
Accounts Receivable Receivables from Employees (part of non-trade receivables) – current assets Advances to Suppliers – Current assets or deduction from Accounts Payable to the same supplier d. Accounts Receivable e. Customers’ Accounts with Credit Balances – Current Liabilities f. Cost of merchandise must be included in inventories g. Accounts Receivable h. Subscriptions Receivable – current asset if collectible within 12 months; otherwise, noncurrent asset or deduction from Shareholders’ Equity i. Other Non-Trade Receivables – Current asset or non-current asset depending on terms of payment j. Advances to Suppliers – Current Assets k. Suppliers’ Accounts with Debit Balances or Advances to Suppliers – Current assets l. Accounts Receivable m. Claims for Income Tax Refund – Current Assets n. Accounts Receivable, amount of loan presented separately as part of liabilities o. Accounts Receivable p. Not recognized anymore (for write off) 3-2.
(Ginoo Company) Gross Method Dec. 9 Accounts Receivable-First Lady Sales 80,000 x 90% x 95% 10
68,400 68,400
Accounts Receivable-Men’s World Sales
50,000
Cash Sales Discounts Accounts Receivable-First Lady
67,032 1,368
26
Accounts Receivable-Teens’ Kingdom Sales
40,000
31
Sales Discounts Allowance for Sales Discounts
19
2014
Jan. 5
9
50,000
68,400
800 800
Cash Allowance for Sales Discounts Accounts Receivable-Teens’ Kingdom
39,200 800
Cash Accounts Receivable-Men’s World
50,000
Net Method Dec. 9 Accounts Receivable-First Lady Sales 68,400 x .0.98
40,000
40,000
50,000
67,032
67,032
Chapter 3 – Receivables 10
Accounts Receivable-Men’s World Sales
49,000
19
Cash Accounts Receivable-First Lady Accounts Receivable-Teens’ Kingdom Sales
67,032
Dec. 26
31
Accounts Receivable-Men’s World Sales Discount Forfeited
39,200
49,000
67,032 39,200
1,000
1,000
2014
Jan. 5
9
Cash Accounts Receivable – Teens’ Kingdom
39,200
Cash Accounts Receivable-Men’s World
50,000
Allowance Method Dec. 9 Accounts Receivable-First Lady Allowance for Sales Discount Sales 10
Dec. 19
26
31 2014
Jan. 5
9
3-3.
39,200
50,000
68,400 1,368 67,032
Accounts Receivable-Men’s World Allowance for Sales Discount Sales
50,000
Cash Allowance for Sales Discount Accounts Receivable-First Lady
67,032 1,368
Accounts Receivable-Teens’ Kingdom Allowance for Sales Discount Sales
40,000
Allowance for Sales Discount Sales Discount Forfeited
1,000 49,000
68,400
800 39,200 1,000 1,000
Cash Allowance for Sales Discount Accounts Receivable-Teens’ Kingdom
39,200 800
Cash Accounts Receivable-Men’s World
50,000
(Colleco Supermarket) June 1- Accounts Receivable – Citibank 30 Cash Accounts Receivable – Metrobank Credit Card Service Charges Sales Cash
50,000
2,450,000 1,764,000 1,470,000 116,000 5,800,000 3,234,000
13
40,000
Chapter 3 – Receivables Accounts Receivable - Citibank Accounts Receivable - Metrobank 3-4.
(Colayco Company) (1) July 14 Allowance for Doubtful Accounts Accounts Receivable-Moret Co.
10,000 10,000
31
Notes Receivable Sales
12,000
Aug. 15
Cash Notes Receivable Sales
20,000 15,000
Cash Credit Card Service Charge Sales 4% x 20,000 = 800
19,200 800
Accounts Receivable-P. Noval Notes Receivable Interest Revenue 12,000 x .10 x 90/360 = 300
12,300
Nov.
1
Nov. 4
5
Nov. 9
Nov. 15
15
Dec. 13
3-5.
2,156,000 1,078,000
Accounts Receivable-Credit Card Sales
9,000
Cash Credit Card Service Charge Accounts Receivable-Credit Card 5% x 9,000 = 450
8,550 450
12,000
35,000
20,000
12,000 300
9,000
9,000
Accounts Receivable-Moret Co. Allowance for Bad Debts
10,000
Cash Accounts Receivable-Moret Co.
10,000
Cash Notes Receivable Interest Revenue 15,000 x 12% x 120/360 = 600
15,600
10,000
10,000
15,000 600
(Format Company) a.
Carrying value of the note on January 1, 2013 P6,000,000 x 0.6575 Prevailing interest rate Interest revenue for 2013
14
P3,945,000 15% P 591,750
Chapter 3 – Receivables b. Carrying value, January 1, 2013 P3,945,000 Add amortization of discount during 2013 Carrying value, December 31, 2013
591,750 P4,536,750
(or simply P3,945,000 x 1.15 = P4,536,750) 3-6.
(Formatted Company) a.
3-7.
3- 8.
Carrying value of the note on January 1, 2013 (P2 M x 2.2832) Interest rate Interest revenue for 2013
P4,566,400 15% P 684,960
Carrying value, December 31, 2013 4,566,400 + 684,960 – 2,000,000 Interest rate Interest revenue for 2014
P3,251,360 15% P 487,704
b. Carrying value, January 1, 2013 P4,566,400 Add amortization of discount during 2012 Less first payment of principal Carrying value, December 31, 2012 (HRV Company)
684,960 (2,000,000) P3,251,360
(a)
September 30, 2014 (1,000,000)+(3,000,000 x 12%) September 30, 2015 (1,000,000)+(2,000,000 x 12%) September 30, 2016 (1,000,000)+(1,000,000 x 12%)
P1,360,000 P1,240,000 P1,120,000
(b)
January 1 – September 30, 2014 (260,000 x 9/12) October 1 – December 31, 2014 (240,000 x 3/12) Total interest revenue for 2014
P 270,000 60,000 P 330,000
(c)
As of December 31, 2013 Notes receivable Interest receivable (360,000 x 3/12)
Non-current P2,000,000
Current P1,000,000 90,000
(Pinky Pop Company) The note is interest-bearing, but the rate of interest of the note (5%) is unreasonably lower than the prevailing rate (10%) for similar obligation.
The present value of the note is determined as
follows: 2.5 M + (5% x 7.5 M) 2,875,000 2.5 M + (5% x 5.0 M) = 2,750,000 2.5 M + (5% x 2.5 M) = 2,625,000 Total or
2.5 M x 2.4869 (5% x 7.5 M) x 0.9091 (5% x 5.0 M) x 0.8264 (5% x 2.5 M) x 0.7513 Total
x x x
0.9091 0.8264 0.7513
P2,613,663 2,272,600 1,972,163 P6,858,426 P6,217,250 340,913 206,600 93,913 P6,858,676
15
Chapter 3 – Receivables
(a)
(b)
2013
Jan. 1
Amortization Table Payment of Interest Date Principal Paid 01/01/13 12/31/13 2,500,000 375,000 12/31/14 2,500,000 250,000 12/31/15 2,500,000 125,000 *difference is due to rounding off
Interest Revenue 685,843 466,927 238,804*
Amortization of Discount 310,843 216,927 113,804*
Journal entries Notes Receivable Discount on Notes Receivable Gain on Sale of Land Land 7,500,000 – 6,858,426 = 641,574 Discount 6,858,426 – 6,000,000 = 858,426 Gain
7,500,000
Cash Discount on Notes Receivable Interest Revenue Notes Receivable
2,875,000 310,843
Cash Discount on Notes Receivable Interest Revenue Notes Receivable
2,750,000 216,927
Cash Discount on Notes Receivable Interest Revenue Notes Receivable Pinky Pip Company
2,625,000 113,804
Dec. 31
Carrying Value 6,858,426 4,669,269 2,386,196 ------------
641,574 858,426 6,000,000
685,843 2,500,000
2014
Dec. 31
466,927 2,500,000
2015
Dec. 31
3-9.
238,804 2,500,000
The note is interest-bearing, but the rate of interest of the note (14%) is unreasonably higher than the prevailing rate (10%) for similar obligation.
The present value of the note is determined as
follows: 2.5 M + (14% x 7.5 M) = 3,550,000 2.5 M + (14% x 5.0 M) = 3,200,000 2.5 M + (14% x 2.5 M) = 2,850,000 Total or
2.5 M x 2.48685 (14% x 7.5 M) x (14% x 5.0 M) x (14% x 2.5 M) x Total
x x x
0.9091 0.8264 0.7513
P3,227,305 2,644,480 2,141,205 P8,012,990 P6,217,125 954,555 578,480 262,955 P8,013,115*
0.9091 0.8264 0.7513
*Difference in the computation is due to rounding off of present values
16
Chapter 3 – Receivables a.
Amortization Table
Date 01/01/13 12/31/13 12/31/14 12/31/15
Payment of Principal 2,500,000 2,500,000 2,500,000
Interest Paid 1,050,000 700,000 350,000
Interest Revenue 801,299 526,429 259,282*
Amortization of Premium 248,701 173,571 90,718*
Carrying Value 8,012,990 5,264,289 2,590,718 ------------
*Difference is due to rounding off b.
Journal entries
2013
Jan. 1
Dec. 31
Notes Receivable Premium on Notes Receivable Gain on Sale of Land Land 8,012,990 – 7,500,000 = 512,990 Premium 8,247,955 – 6,000,000 = 2,247,955 Gain
7,500,000 512,990
Cash Premium on Notes Receivable Interest Revenue Notes Receivable
3,550,000
Cash Premium on Notes Receivable Interest Revenue Notes Receivable
3,200,000
Cash Premium on Notes Receivable Interest Revenue Notes Receivable
2,850,000
2,012,990 6,000,000
248,701 801,299 2,500,000
2014
Dec. 31
173,571 526,429 2,500,000
2015
Dec. 31
3-10.
90,718 259,282 2,500,000
(Word Company) Uncollectible Accounts Expense Allowance for Uncollectible Accounts
P52,000 50,000
Required balance in allowance account: (2% x 500,000) + (10% x 200,000) + (20% x 100,000) Reported balance in allowance before adjustments (debit) Required adjustment charged to uncollectible accounts expense
17
P50,000 2,000 P52,000
Chapter 3 – Receivables
3-11.
(Edit Company) Allowance for Uncollectible Accounts, beg Recovery of accounts previously written off Uncollectible accounts expense for 2013 Allowance for Uncollectible Accounts, end Accounts written off during 2013
3-12.
P 6,000 3,000 48,000 (12,000) P45,000
(Toyota Products, Inc.) a.
b.
Accounts receivable Sales
4,800,000
Cash Sales discounts Accounts receivable
3,920,000 80,000
4,800,000
4,000,000
c.
Allowance for uncollectible accounts Accounts receivable
d.
Accounts receivable Allowance for uncollectible accounts
5,000
Cash Accounts receivable
5,000
Notes receivable Accounts receivable
25,000
Cash Notes payable-bank
400,000
Cash Accounts receivable
150,000
Notes payable-bank Cash
150,000
e.
f.
g.
h.
20,000
20,000
5,000
5,000
25,000
400,000
150,000
Uncollectible Accounts Expense Allowance for Uncollectible Accounts 9,000 – 20,000 + 5,000 = 6,000 debit 59,000 + 6,000 = 65,000 Interest receivable Interest revenue 25,000 x 12% x 30/360
65,000 65,000
250
Accounts receivable (450,000+4,800,000–4,000,000–20,000–25,000–150,000) Less Allowance for uncollectible accounts Amortized cost of accounts receivable
18
150,000
P1,055,000 59,000 P 996,000
250
Chapter 3 – Receivables 3-13.
(Rav, Inc.) Accounts Receivable, December 31, 2012 Sales on account during 2013 Cash received from customers Cash discounts allowed: (882,000 ÷ 98%) x 2% (495,000 ÷ 99%) x 1% Recovery of accounts written off Accounts written off as worthless Credit memoranda for sales returns Accounts Receivable, December 31, 2013
P18,000 5,000
Allowance for Uncollectible Accounts, December 31, 2012 Recovery of accounts written off Accounts written off as worthless Impairment loss on receivables Allowance for Uncollectible Accounts, December 31, 2013
P 337,000 1,500,000 (1,600,000) (23,000) 3,000 (11,000) (6,000) P 200,000 P 12,000 3,000 (11,000) 15,000 P 19,000
The computation may also be conveniently done through T-accounts, as follows:
Balance, beg Sales on account Recovery Total Balance, end
Write off
Total
3-14.
Accounts Receivable 337,000 Collections 1,500,000 Cash discounts 3,000 Write off Sales returns 1,840,000 Total 200,000
1,600,000 23,000 11,000 6,000 1,640,000
Allowance for Uncollectible Accounts 11,000 Balance, beg Recovery Impairment 11,000 Total Balance, end
12,000 3,000 15,000 30,000 19,000
(Revo Company) Allowance for Uncollectible Accounts, January 1, 2013 Accounts written off Recovery of accounts previously written off Additional accounts written off Allowance for Uncollectible Accounts, December 31, 2012 before adjustments (debit balance) Required balance in Allowance account based on aging: (5% x 240,000) + (25% x 20,000) + (50% x 30,000) + (90% x 24,000) Required adjustment/Uncollectible Accounts Expense for 2013
P 34,000 (47,000) 7,000 (6,000) (P12,000) 53,600 P65,600
Accounts Receivable, December 31, 2013
P654,000
Less Allowance for Uncollectible Accounts Net amortized cost
53,600 P600,400
19
Chapter 3 – Receivables 3-15.
(Adventure Company) a.
3-16.
Required/Adjusted balance of Allowance for Uncollectible Accounts: 20% x 600,000 past due accounts P 120,000 5% x 1,400,000 current accounts 70,000 Total P 190,000
Accounts Receivable, December 31 Past due accounts Current accounts/Not yet past due
P 2,000,000 600,000 P 1,400,000
Accounts Receivable, January 1 Sales during 2012 Cash collected from customers Recovery of accounts previously written off Note received in settlement of an account Accounts written off as worthless Accounts Receivable, December 31
P 1,200,000 10,000,000 (8,720,000) 20,000 ( 400,000) ( 100,000) P 2,000,000
b.
Adjusted Allowance for Uncollectible Accounts, end Accounts written off during the year as worthless Recovery of accounts previously written off Allowance for Uncollectible Accounts, beg Uncollectible Accounts Expense for year 2013
P190,000 100,000 (20,000) (60,000) P210,000
c.
Accounts Receivable Less Allowance for Uncollectible Accounts Amortized cost of accounts receivable, December 31, 2013
P2,000,000 190,000 P1,810,000
(Maynilad Company) Alternative 1 Carrying value (10 M + 1.2 M) Present value of future cash inflows: Principal due on 12/31/15 (9M x 0.7972) Interest for 2 years 9M x 8% = 720,000; 720,000 x 1.6901 Impairment loss Entry: Restructured Notes Receivable Impairment Loss – Receivables Notes Receivable Interest Receivable Alternative 2 Carrying value (10 M + 1.2 M) Present value of future cash inflows: 2M + (8% x 10M) = 2,800,000 x 0.8929 2M + (8% x 8M) = 2,640,000 x 0.7972 2M + (8% x 6M) = 2,480,000 x 0.7118
20
11,200,000 P7,174,800 1,216,872
8,391,672 2,808,328
8,391,672 P2,808,328
10,000,000 1,200,000
11,200,000 2,500,120 2,104,608 1,765,264
Chapter 3 – Receivables 2M + (8% x 4M) = 2,320,000 x 0.6355 2M + (8% x 2M) = 2,160,000 x 0.5674 Impairment loss
1,474,360 1,225,584
Entry: Restructured Notes Receivable Impairment Loss – Receivables Notes Receivable Interest Receivable
9,069,936 2,130,064
Alternative 3 Carrying value Present value of future cash inflows: Principal due on 12/31/15 10M x 0.7972 7,972,000 Interest due on 12/31/14 and 12/31/15 10M x 9% = 900,000; 900,000 x 1.6901 1,521,090 Impairment loss Entry: Restructured Notes Receivable Impairment Loss – Receivables Notes Receivable
9,493,090 506,910
Cash Interest Receivable
1,200,000
Alternative 4 Carrying value Present value of future cash inflows: Principal due on 12/31/13 11.2M x 0.797193876 Interest due on 12/31/13 and 12/31/14 11.2M x 12% = 1,344,000; 1,344,000 x 1.6900510 Impairment loss
9,069,936 2,130,064
10,000,000 1,200,000
10,000,000
9,493,090 506,910
10,000,000
1,200,000
11,200,000
8,928,572
2,271,428
11,200,000 -0-
No entry is required for the restructuring. 3-17.
(Kate Company) (a) Cash Notes Payable – National Bank (b)
3-18.
750,000 750,000
Current assets: Trade and other receivables (including P900,000 of accounts pledged as collateral for a loan with National Bank)
P2,000,000
Current liabilities: Notes Payable – National Bank Interest Payable
P 750,000 7,500
(Lexus Company) Amount of the loan Less service charge (2% x 800,000) Net proceeds from the assignment of accounts receivable
21
P650,000 16,000 P634,000
Chapter 3 – Receivables
Sept. 1
Sept 1-30
Accounts Receivable Assigned Accounts Receivable
800,000
Cash Finance Charges Notes Payable – Pacific Bank
634,000 16,000
Cash
300,000
650,000
Accounts Receivable Assigned Sept. 30
Oct. 1-31
Notes Payable – Pacific Bank Interest Expense (650,000 x 12% x 1/12) Cash Allowance for Uncollectible Accounts Accounts Receivable Assigned Cash
Oct.
31
Accounts Receivable Assigned
Notes Payable – Pacific Bank Interest Expense (350,000 x 12% x 1/12) Cash
31
3.19.
Accounts Receivable Accounts Receivable Assigned Accord Company) July 1
1
21
31
Aug. 1
300,000 300,000 6,500
10,000
400,000
100,000
3,040,000 160,000
Sales Returns and Allowances Accounts Receivable Assigned
150,000
Cash Sales Discounts Accounts Receivable Assigned 2% x 2,500,000 = 50,000
2,450,000 50,000
Notes Payable – Bank Interest Expense (3.2M x 0.12 x 1/12) Cash
2,500,000 32,000
Cash Accounts Receivable Assigned
22
400,000
100,000
Cash Finance Charges Notes Payable – Bank 5% x 3,200,000 = 160,000
31
10,000
353,500
4,000,000
Allowance for Uncollectible Accounts Accounts Receivable Assigned
306,500
350,000 3,500
Accounts Receivable Assigned Accounts Receivable
15
800,000
4,000,000
3,200,000
150,000
50,000
1,000,000
2,500,000
2,532,000
50,000
1,000,000
Chapter 3 – Receivables Sept. 1
1
3–20.
1
31
Nov. 30
Accounts Receivable Accounts Receivable Assigned
300,000
707,000
300,000
Accounts Receivable Assigned Accounts Receivable
2,000,000
Cash Finance Charges Notes Payable
1,410,000 90,000
Interest Expense (1.5M x 0.12 x 1/12) Notes Payable Accounts Receivable Assigned
15,000 985,000
Notes Payable Interest Expense (515,000 x 0.12 x 1/12) Cash Accounts Receivable Assigned
515,000 5,150 279,850
b. Dec. 31
684,000 36,000 80,000
Cash Finance Charges Notes Payable-Bank 3% x 600,000 = 18,000
582,000 18,000
Uncollectible Accounts Expense Allowance for Uncollectible Accounts (190,000 + 1,000,000) x 2% = 23,800 – 13,400
10,400
(Hiku Company) (a)
Selling price of Accounts Receivable 90% x P1,200,000= Factor’s holdback (6% x 1,080,000) Cash received from factoring
P1,080,000 (64,800) P1,015,200
(b)
Accounts receivable assigned balance (500,000 – 350,000) Balance of notes payable to the bank 400,000 – (350,000 – 4,000) Equity on assigned accounts
P 150,000
23
2,000,000
1,500,000
1,000,000
800,000
(Highlander Company) a. Sept. 1 Cash Receivable from Factor Loss from Factoring Accounts Receivable 800,000 x 10% =80,000 Loss; 720,000 x 5% = 36,000 withheld Nov. 1
3-22.
700,000 7,000
(Fortune Company) Oct. 1
3-21.
Notes Payable – Bank Interest Expense (700,000 x 0.12 x 1/12) Cash
P
(54,000) 96,000
800,000
600,000
10,400
Chapter 3 – Receivables
(c)
3-23.
3-24.
Face value of note discounted Interest for the full term April 30 – August 28 (50,000 x 9% x 120/360) Maturity value Discount (51,500 x 10% x 88/360) Proceeds
P
P P
1,500 51,500 (1,259) 50,241
( Edsamail Company) (a)
Maturity value = 500,000 + (500,000 x .08) = 540,000 Proceeds = 540,000 – (540,000 x 0.10 x 5/12) = 517,500
(b)
Interest Receivable Interest Revenue 500,000 x 8% x 7/12
a.
23,333 23,333
Cash Loss on Sale of Notes Receivable Notes Receivable Interest Receivable
517,500 5,833
Proceeds 90,000 – (90,000 x 0.12 x 20/365)
= P89,408
500,000 23,333
Cash
89,408 Liability on Discounted Notes
b.
Maturity value 75,000 + (75,000 x 0.09 x 90/365) Proceeds 76,664 – (76,664 x 0.12 x 50/365) Cash
89,408 = P76,664 = P75,404 75,404
Liability on Discounted Notes c.
Maturity value 60,000 + (60,000 x 0.14 x 120/365) Proceeds 62,762 – (62,762 x 0.12 x 45/365) Cash
3-25.
50,000
Liability on Discounted Notes
75,404 = P62,762 = P61,833 61,833
61,833
(Crosswind Corporation) 2013
Feb. 1
Notes Receivable Accounts Receivable
60,000
Apr. 1
Cash Liability on Discounted Notes 60,000 + (60,000 x .10 x 9/12) = 64,500 64,500 – (64,500 x .12 x 7/12) = 59,985
59,985
24
60,000
59,985
Chapter 3 – Receivables Nov. 2
2
3-26.
Liability on Discounted Notes Interest Expense (64,500 x 0.12 x 7/12) Notes Receivable Interest revenue (60,000 x 0.10 x 9/12)
59,985 4,515
Accounts Receivable (64,500 + 1,500) Cash
66,000
60,000 4,500
66,000
(Explorer Company) (a) Accounts receivable factored Purchase price Purchase price of accounts receivable factored Less amount withheld (5% x 1,700,000) Net cash received from the factored accounts (b) Cash Receivable from Factor Loss on Factoring Accounts Receivable
3.27.
P2,000,000 85% P 1,700,000 85,000 P 1,615,000
1,615,000 85,000 300,000
Sales Returns Receivable from Factor
30,000
Cash
55,000
2,000,000
30,000
Receivable from Factor
30,000
(Nature Company) (a) 1/1/12
Interest Revenue Interest Receivable
2,800 2,800
(1)
Accounts Receivable Sales
2,800,000
(2)
Cash Sales Discounts Accounts Receivable (2,218,000 – 180,000)* Accounts Receivable Assigned *
2,200,000 18,000
(3)
Notes Receivable Accounts Receivable
250,000
(4)
Cash Notes Receivable Interest Revenue
216,000
(5)
2,800,000
2,038,000 180,000
250,000
200,000 16,000
Cash Liability on Discounted Notes
41,400 41,400
25
Chapter 3 – Receivables
(6)
Liability on Discounted Notes Interest expense Notes Receivable Interest revenue
41,400 4,600
Accounts Receivable Assigned Accounts Receivable
300,000
Cash Finance Charges Notes Payable
222,000 18,000
40,000 6,000
300,000
240,000
(7)
Accounts Receivable Notes Receivable Interest Revenue
15,900
(8)
Allowance for Uncollectible Accounts Accounts Receivable
12,000
(9)
Notes Payable Interest Expense Cash
(10)
180,000 3,000
Uncollectible Accounts Expense Allowance for Uncollectible Accounts 20,000 – (12,000 – 12,000 )
12,000
183,000
20,000 20,000
(11)
Interest Receivable Interest Revenue *See item (9) (b)
15,000 900
3,200 3,200
Trade and Other Receivables
P1,014,100
Trade and Other Receivables include the following: Notes Receivable Accounts Receivable – Unassigned Accounts Receivable - Assigned Interest Receivable Allowance for Uncollectible Accounts Total
26
P
95,000 815,900 120,000 3,200 (20,000) P1,014,100
Chapter 3 – Receivables
MULTIPLE CHOICE QUESTIONS Theory MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10
A B A A C A D A A C
MC11 MC12 MC13 MC14 MC15 MC16 MC17 MC18
C C A C A D A C
Problems MC19 MC20
B D
MC21 MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29
C B A D D C D B B
MC30 MC31 MC32 MC33 MC34 MC35 MC36 MC37
A A B D C C C B
MC38 MC39 MC40 MC41 MC42 MC43
A C B B D C
450,000 x 1.4 = 630,000; 630,000 – 585,000 = 45,000 105,000 x .90 = 94,500 (Invoice price/Gross) 94,500 x .98 = 92,610 (net price) 200,000 x .90 x .95 = 171,000 (Invoice price/Gross); 171,000 x .97 = 165,870 (Net) 1,300,000 + 5,400,000 + 25,000 – 4,750,000 – 125,000 = 1,850,000 360,000 ÷ 80% = 450,000; 450,000 + 80,000 – 430,000 = 100,000 75,000 + 45,000 = 120,000 3% x 1,000,000 = 30,000 30,000 + 8,000 = 38,000 270,000 – 250,000 = 20,000; 20,000 + 23,000 – 28,000 – 5,000 = 10,000 17,500 – 30,500 + 8,050 + 200,000 = 15,050 480,000 + 2,400,000 – 2,560,000 – 17,600 – 36,800* + 4,800 = 270,400 *1,411,200 ÷ .98 = 1,440,000 x 2% = 28,800 792,000 ÷ .99 = 800,000 x 1% = 8,000; 28,800 + 8,000 = 36,800 19,200 + 4,800 – 17,600 = 6,400; 5% x 270,400 = 13,520; 13,520 – 6,400 = 7,120 (5% x 600,000) + (10% x 40,000) + 14,000 = 48,000 20,000 + 7,500 – 12,500 – 3,700 = 11,300 50,000 + (50,000 x 10%) = 55,000; 55,000 – (55,000 x .12 x 6/12) = 51,700 400,000 x .75 = 300,000; 300,000 x 10% = 30,000 300,000 + 30,000 = 330,000 1,940,000 x 13.4% x 1/12= 21,663 2,000,000 x 12% x 1/12 = 20,000 (Note: The difference between interest income of P21,663 and interest receivable of 20,000 is debited to Discount on Notes Receivable). 902,500 – (11% x 2,800,000) = 594,500 (308,000 x 6/12) + (242,605 x 6/12) = 275,303 (See complete amortization table below)* 500,000 + (500,000 x 8%) = 540,000; 540,000 – (540,000 x 10% x 8/12) = 504,000 1,250,000 - (2% x 1,250,000)} = 1,225,000; 1,225,000 + 695,000 = 1,920,000 (500,000 + 2,200,000) x 3% = 81,000; 81,000 – 32,000 = 49,000 550,000 – [(500,000 x 0.8265) + (40,000 x 1.7355)] = 67,380
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Chapter 3 – Receivables
MC44 MC45 * Date July 1, July 1, July 1, July 1, July 1,
A D
2012 2013 2014 2015 2016
5,500,000 – [(4,000,000 X .83) + (320,000 X 1.74)] = 1,623,200 (4,000,000 X .83) + (320,000 X 1.74) = 3,876,800
Annual payment 902,500 902,500 902,500 902,500
Interest income
11% x 2,800,000=308,000 11% x 2,205,500=242,605 11% x 1,545,605=170,017 902,500-813,122=89,378
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Reduction in principal 902,500-308,000=594,500 902,500-242,605=659,895 902,500-170,017=732,483 813,122
Balance 2,800,000 2,205,500 1,545,605 813,122 -0-
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