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How much was Bae proceeds from the discounted note

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Reference no: EM132831732

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Q1. On July 1, 2020, Bae Inc. sold equipment to Beau Inc. for $250,000. Bae Inc. accepted a 10% note receivable of the entire sales price. This note is payable in 2 equal installments of $125,000 plus accrued interest on December 31, 2020, and December 31, 2021. On July 1, 2021, Bae Inc. discounted the note at a bank at an interest rate of 12%. How much was Bae's proceeds from the discounted note?

Q2. The information taken from the books of Lyle Co. as of December 31, 2021 are the following:

Trade accounts receivable - 2,000,000

Allowance for doubtful accounts - 100,000

Claim against shipper for goods lost in transit in November 2021 - 300,000

Selling price of unsold goods sent by Lyle Co. on consignment to Aly Co. at 150% of cost - 600,000

Security deposit on lease of warehouse - 200,000

How much should be shown as trade and other receivables at the current asset section of the statement of financial position on December 31, 2021?

Q3. On October 1, 2021, Smash Company discounted its own note of $500,000 at 10% for 1 year. In its statement of financial position on December 31, 2021, what is the carrying amount of notes payable to be presented as current liability by Smash Company?

Q4. In preparing the aging of accounts receivable of Liza Inc., the accountant determined that the net realizable value of receivables is 4,000,000 on December 31, 2021. Additional data are as follows:

Accounts Receivable (December 31, 2021) - 4,500,000

Accounts Receivable - Net (December 31, 2020) - 2,000,000

Accounts Receivable (January 1, 2021) - 2,350,000

Accounts written off during 2020 - 100,000

How much is the doubtful accounts expense for 2021?

Q5. On January 1, 2019, Love Co. sold merchandise to Kit Store in exchange for a non-interest bearing note requiring 10 annual payments of 100,000. Kit Store made the first payment on December 31, 2019. The prevailing market interest rate for similar notes is 8%.

a. How much is the value of notes receivable as of December 31, 2020?

b. How much is the Interest income recognized during 2020?

Reference no: EM132831732

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