Reference no: EM132749758

Questions - Please provide solutions and explanations for the following questions

Q1) On October 1, 2016, Lavalon company sold merchandise to a buyer and received a 6-month 10% 400,000 note receivable. On December 1, 2016, Lavalon indorsed the note to financial Guarantee Corporation at 12%

If the discounting was made on a without recourse basis (absolute sale), what is the gain or loss related to the discounting?

Q2) Robert Company began operations on December 1, 2016 as a distributor of cellphone and tablet accessories. On December 18, 2016, Robert sold merchandise costing 200,000 for 300,000 under the following terms: 2/10, n/30, FOB Destination and Freight collect. Freight amounted to 10,000. The merchandise was received by the buyer on December 26, 2016. On December 28, 2016, the buyer paid the total amount due. What is the total amount received by Robert on December 28, 2016?

Q3) On October 1, kagome inc. sold on account goods with a price list of 100,000 under the following terms: Trade discounts of 20% and 10%; cash discounts of 2/10, n/30; FOB shipping point and freight prepaid. Freight amounted to 4,000. Kagome's policy is to record accounts receivable and sales at net amount of cash discount. On October 12, the buyer paid the total amount due.

What is the total amount received by kagome on October 12?

Q4) On November 1, 2016, Eve company hypotheticated its 5,000,000 account receivable to obtain immediate cash for business requirement purposes. PNB Bank granted a 1-year 3,000,00 loan discounted at 20% interest. The loan has 200,000 restricted compensating balance. (Use straight line method in amortizing discounts). What is the total amount of cash received from receivable financing on November 1, 2016?

Q5) On January 2, 2016, Hazel Company sold for P400,000 an old machine having an original cost of P540,000 and a book value of P350,000. Hazel received a non-interest bearing promissory notes as consideration for the sale. The principal in four equal annual installments every January 1 starting on January 2, 2016. The agreement of sale states no interest rate. However, 12% would be a fair value for this type of transaction. The PV of 1 at 12% for 4 periods is .6355, the PV of Annuity of 1 at 12% for 4 periods is 3.0373 and the PV of Annuity Due at 12% for 4 periods is 3.4018. What is the carrying value of the notes receivable to be presented on the statement of financial position as of December 31, 2016?

Q6) ABC Company had a January 1, 2016 credit balance in the Allowance for Doubtful Accounts of P10,000. During 2016, sales and sales return &allowances amounted to P5,100,000 and P100,000, respectively. ABC also wrote off P60,000 of accounts receivable and collected P5,000 on accounts previously written off. The balance of AR was 700,000 at 1/1/2016 and P800,000 at 12/31/16.

If the estimate of uncollectible is made by taking 1.5% of net credit sales, the adjustments is?

If the estimate of uncollectible is made by taking 10% of gross accounts receivable, the amount of allowance for bad debt as of December 31, 2016 is?

If the estimate of uncollectible is made based on the required allowance per aging of P90,000, the amount of Bad debt expense is?

Q7) On October 1, 2016, Lavalon company sold merchandise to a buyer and received a 6-month 10% 400,000 note receivable. On December 1, 2016, Lavalon indorsed the note to financial Guarantee Corporation at 12%

If the discounting was made on a with recourse basis (secured borrowing), what is the gain or loss related to the discounting?