Reference no: EM132833230

Question -

Q1. Nokia Inc. is a manufacturer of cellular phones in the Philippines.

In the December 31, 2020 Trial Balance of Nokia Inc., the following notes receivable are presented:

Short-term Note Receivable - 10% P1,000,000

Short-term Non-Interest Bearing Note Receivable from SM 2,000,000

Short-term Non-Interest Bearing Note Receivable from Robinson 3,000,000

Long-term Note Receivable - 12% 4,000,000

Long-term Non-Interest Bearing Note Receivable from Globe 5,000,000

Long-term Non-Interest Bearing Note Receivable from Smart 6,000,000

The following notes are also provided:

a. The short-term interest bearing note receivable has remaining term of 9 months.

b. The short-term non-interest bearing note receivable from SM has a remaining term of 6 months. The note requires one-time payment of P2,000,000 on July 1, 2021. The implied interest rate of this type of note is 10%.

c. The short-term non-interest note receivable from Robinson is payable in three equal quarterly installments on April 1, 2021, July 1, 2021 and October 1, 2021.

d. The long-term interest bearing note receivable has remaining term of 2 years.

e. The long-term non-interest bearing note receivable from Globe will be due on December 31, 2025. The note requires one-time payment of principal. The implied interest rate of this type of note is 10%.

f. The long-term non-interest bearing note receivable from Smart is payable in six annual equal installments every December 31. The implied interest rate of this type of note is 10%.

Required - Based on the result of your audit, determine the following:

I. Total amount to be presented as Current Notes Receivable on December 31, 2020 Statement of Financial Position

II. Total amount to be presented as Non-current Notes Receivable on December 31, 2020 Statement of Financial Position

Q2. Helen, Eva and Bong have been partners sharing net income and losses in a 5:3:2 ratio. On October 31, the date Bong retires from the partnership, the equities of the partners are Helen, 104,000; Eva, 160,000 and Bong , 40,000.

Required - Compute the Capital balances of the remaining partners after the retirement of Bong with the following cash payment to Bong for his equity:

I. 40,000

II. 48,000

III. 36,000