Professional Documents
Culture Documents
#1
2011
Oct. 1 Cash 3,600,000.00
Discount on note payable (10% x 4,000,000) 400,000.00
Note payable - bank 4,000,000.00
2012
Oct. 1 Note payable - bank 4,000,000.00
Cash 4,000,000.00
#2
Current liabilites:
Note payable - bank (Note3) 4,000,000.00
Discount on note payable (300,000.00)
Carrying amount 3,700,000.00
10 Cash 490,000
Sales discount (2% x 500,000) 10,000
Accounts receivable - assigned 500,000
20 Cash 200,000
Accounts receivable - assigned 200,000
Requirement a
1 Cash 1,250,000.00
Service charge 50,000.00
Note payable - bank 1,300,000.00
31 Cash 970,000.00
Sales discount 30,000.00
Accounts receivable - assigned 1,000,000.00
Requirement b
The accounts receivable - assigned with a balance of P500,000 should be classified as current
asset and included in trade and other receivables.
The note payable - bank of P343,000 should be classified and presented as a current liability.
Cash 400,000.00
Allowance for doubtful accounts 30,000.00
Loss on factoring 70,000.00
Accounts receivable 500,000.00
Problem 9 - 12
Cash 5,000,000.00
Receivable from factor 300,000.00
Allowance for bad debts 250,000.00
Loss on factoring 450,000.00
Accounts receivable 6,000,000.00
Problem 9 - 13
1. Cash 4,500,000.00
Allowance for doubtful accounts 200,000.00
Receivable from factor 600,000.00
Loss on factoring 700,000.00
Accounts receivable 6,000,000.00
AR factored 6,000,000.00
Factor's holdback (10% x 6,000,000) (600,000.00)
Commission (15% x 6,000,000) (900,000.00)
Cash received 4,500,000.00
AR 6,000,000.00
Commission (900,000.00)
Net sales price 5,100,000.00
Book value of AR (6,000,000 - 200,000) 5,800,000.00
Loss on factoring (700,000.00)
2. Cash 600,000.00
Receivable from factor 600,000.00
Problem 9 - 14
3 Cash 340,000.00
Sales discount (2% x 500,000) 10,000.00
Commission (5% x 500,000) 25,000.00
Receivable from factor (25% x 500,000) 125,000.00
Accounts receivable 500,000.00
11 No entry
Cash 225,000.00
Service charge (5% x 300,000) 15,000.00
Note payable - bank 240,000.00
The receivable from factor of P40,000 is also included in trade and other receivables.
The note payable - bank of P240,000 is classified and presented as current liability.
However, the company should disclose th eequity in assigned accounts as follows:
1. Cash 2,250,000.00
Receivable from factor 300,000.00
Allowance fro doubtful accounts 100,000.00
Loss on factoring 350,000.00
Accounts receivable 3,000,000.00
2. Cash 250,000.00
Receivable from factor 250,000.00
2. Cash 2,500,000.00
Accounts receivable 2,500,000.00
Principal 500,000.00
Interest (500,000 x 12% x 6/12) 30,000.00
Maturity value 530,000.00
Discount (530,000 x 15% x 4/12) 26,500.00
Net proceeds 503,500.00
Principal 500,000.00
Accrued interest receivable (500,000 x 12% x 2/12) 10,000.00
Carrying amount of NR 510,000.00
July 1 No entry
VALIX 9-20
Principal 2,000,000.00
Add: Interest (2M x 12% x 60/360) 40,000.00
Maturity value 2,040,000.00
Less: Discount (2.04M x 15% x 45/360) (38,250.00)
Net proceeds 2,001,750.00
Principal 2,000,000.00
Accrued interest receivable (2M x 12% x 10,000.00
Carrying amount of Notes Receivable 2,010,000.00
Requirement a
Principal 500,000.00
Add: Interest (500,000 x 12% x 60/360) 10,000.00
Maturity value 510,000.00
Less: Discount (510,000 x 14% x 45/360) 8,925.00
Net proceeds 501,075.00
Principal 500,000.00
Accrued interest receivable (500,000 x 12% x 15/360) 2,500.00
Carrying amount of NR 502,500.00
Principal 1,000,000.00
Less: Discount (1,000,000 x 12% x 15/360) 5,000.00
Net proceeds 995,000.00
Principal 1,500,000.00
Add: Interest (1,500,000 x 12% x 60/360) 30,000.00
Maturity value 1,530,000.00
Less: Discount (1,530,000 x 12% x 50/360) 25,500.00
Net credit 1,504,500.00
Principal 300,000.00
Interest (300,000 x 12% x 6/12) 18,000.00
Maturity value 318,000.00
Less: Discount (318,000 x 15% x 3/12) 11,925.00
Net proceeds 306,075.00
Principal 300,000.00
Accrued interest receivable (300,000 x 12% x 3/12) 9,000.00
Carrying amount of NR 309,000.00
28 Cash 210,120.00
Accounts receivable 206,000.00
Interest income (206,000 x 12% x 60/360) 4,120.00
31 Cash 336,600.00
Accounts receivable 330,000.00
Interest income (330,000 x 12% x 2/12) 6,600.00
330,000.00
12%
1/ 6
6,600.00
Problem 9 - 23
1. Cash 5,021,250.00
Interest expense 28,750.00
Liability for note receivable discounted 5,000,000.00
Interest income 50,000.00
Principal 5,000,000.00
Interest (5,000,000 x 12% x 90/360) 150,000.00
Maturity value 5,150,000.00
Discount (5,150,000 x 15% x 60/360) 128,750.00
Net proceeds 5,021,250.00
Principal 5,000,000.00
Accrued interest receivable (5,000,000 x 12% x 30/360) 50,000.00
Carrying amount of NR 5,050,000.00
Principal 2,000,000.00
Interest (2,000,000 x 10% x 9/12) 150,000.00
Maturity value 2,150,000.00
Discount (2,150,000 x 12% x 6/12) 129,000.00
Net proceeds 2,021,000.00
Principal 2,000,000.00
Accrued interest receivable (2M x 10% x 3/12) 50,000.00
Carrying amount of NR 2,050,000.00
Principal 5,000,000
Interest (5,000,000 x 12% x 90/360) 150,000
Maturity value 5,150,000
Discount (5,150,000 x 12% x 60.360) 103,000
Net proceeds 5,047,000
Principal 5,000,000
Accrued interest receivable (5M x 12% x 30/360) 50,000
Carrying amount of NR 5,050,000
Principal 6,000,000
Interest (6M x 10% x 60/360) 100,000
Maturity value 6,100,000
Discount (6,100,000 x 12% x 45/360) 91,500
Net proceeds 6,008,500
Principal 6,000,000
Accrued interest receivable (6M x 10% x 15/360) 25,000
Carrying amount of NR 6,025,000