Reference no: EM132772817

Questions -

Q1. On January 1, 2020, Oust the Turtle Company received a non-interest-bearing note for P400,000. The note is payable in two equal instalments with the first payment to be made on December 31, 2021 and the next payment a year after. The effective rate is at 10% How much is the present value of the note on January 1, 2020?

Q2. On January 1, 2020, Oust the Turtle Company received a non-interest-bearing note for P400,000. The note is payable in two equal instalments with the first payment to be made on December 31, 2021 and the next payment a year after. The effective rate is at 10%. How much is the interest income on December 31, 2020?

Q3. On June 30, 2020, the entity also discounted a customer's note with recourse at a bank at a 10% discount rate. The note is dated May 1, 2020 has a term of 90 days, a face value of P 6,000,000 and an interest rate of 9%. The entity accounted for this transactions as a secured borrowing. The customer paid the note to the bank on maturity date. What is the amount of proceeds from discounting the note on June 30, 2020?

Q4. On December 31, 2019. Jan Company sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest-bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar note was 12%. The present value of an ordinary annuity of 1 is 5.65 for ten periods and 5.33 for nine periods. What is the carrying amount of notes receivable on December 31, 2020?

Q5. At the end of its first year of operations, December 31, 2019. Cauayan, Inc. reported the following information:

Accounts receivable, net of allowance for doubtful accounts 9,500,000

Customer account written off as uncollectible during 2019 240,000

Bad debts expense for 2019 840,000'

What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?

Q6. The following accounts were taken from Cervantes Inc.'s balance sheet at December 31, 2019.

Debit Credit

Accounts receivable 4,100,000

Allowance for doubtful accounts 100,000

Net credit sales 7,500,000

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2019.