Reference no: EM132886845

Question -

Q1. An entity sells goods for 150,000 to a customer who was granted a special credit period of 1 year. The entity normally sells the goods for 120,000 with a credit period of one month or with a 10,000 discount for outright payment in cash. Compute for the initial measurement of the receivable?

Q2. On January 1, 20x1, ABC Co. sold a transportation equipment with a historical cost of 1,000,000 and accumulated depreciation of 300,000 in exchange for cash of 100,000 and a noninterest-bearing note receivable of 800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%. Prepare the amortization table using effective interest method.

Q3. On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of 12,000,000 and accumulated depreciation of 7,000,000 in exchange for cash of 100,000 and a noninterest-bearing note receivable of 4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January 1 thereafter. The prevailing rate of interest for this type of note is 12%. Prepare the amortization table using effective interest method.