Sanchez Activity2.2

Carmina Sanchez
BSMA 2201
2. BB Company provided the following information relating to accounts receivable for the current year:
Accounts receivable, Jan 1 P 1,300,000

Credit sales 5,400,000
Collections from customers, excluding recoveries 4,750,000
Accounts written off 125,000
Collection of accounts written off in prior year (customer credit was
not reestablished) 25,000
Estimated uncollectible receivables per aging of receivables 165,000
What is the balance of accounts receivable before allowance for doubtful accounts on December 31?
Accounts recievable- January 1 1,300,000
Add: Credit sales 5,400,000
Total 6,700,000
Less: collections from customers 4,750,000
Accounts written off 125,000 4,875,000
Accounts recievable, December 31 1,825,000
3. Hope Company provided the following information relating to current operations:

Accounts receivable, Jan 1 P 4,000,000
Accounts receivable collected 8,400,000
Cash sales 2,000,000
Inventory, Jan 1 4,800,000
Inventory, Dec 31 4,400,000
Purchases 8,000,000
Gross margin on sales 4,200,000
Required: Compute for the following:

1. Gross sales
Inventory, Jan 1 4,800,000
Purchases 8,000,000
Inventory, Dec 31 (4,400,000)
Cost of sales 8,400,000
Add: gross margin on sales 4,200,000
Gross Sales 12,600,000
2. Credit sales
Gross Sales 12,600,000
Cash Sales (2,000,000)
Credit Sales 10,600,000
3. Accounts receivable, December 31

Accounts receivable, January 1 4,000,000
Credit sales during the year 10,600,000
Accounts receivable collected (8,400,000)
Accounts Receivable, December 31 6,200,000
4. On December 31, 2018, Saya Co. sold a machine in the ordinary course of business to SobrangSaya Co
in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity
made the first payment on December 31, 2018. The market interest rate for similar notes at date of
issuance was 8%.
PV of an ordinary annuity of 1 at 8% for 9 periods 6.25
PV of an ordinary annuity of 1 at 8% for 10 periods 6.71
Required: Compute for the following:
1. Net selling price

Present value of the note 6,250,000
Add: Annual payment 1,000,000
Net Selling price 7,250,000

2. Carrying amount of the note, December 31, 2018
Annual Payment 1,000,000 * 6.25
Carrying amount 6,250,000

3. Interest income, 2019
Carrying amount of note- December 2019, 6,250,000
Interest Rate * 8%
Interest income, 2019 500,000

4. Carrying amount, December 31, 2019
Carrying amount of note- December 2018 6,250,000
Less: Interest income 2019 (500,000)
Carrying amount, December 2019, 5,750,000

5. An entity manufactures and sells machinery. On January 1, 2020, the entity sold machinery costing
P280,000 for P400,000. The buyer signed a noninterest bearing note for P400,000 payable in four equal
installments every December 31. The cash sales price of the machinery is P350,000.
Required:
a. Compute for the following as of December 31, 2020:
1. Gain or loss on sale of machinery
2. Interest income
3. Current portion of the notes receivable
4. Noncurrent portion of the notes receivable
b. Prepare all the necessary entries in 2020.
Face value of note 400,000

Present value cash sale price 350,000
Unearned interest income. 50,000
Cash sale price 350,000
Cost of machinery 280,000
Gross income 70,000
NOTES RECIEVABLE fraction interest income
2020 400,000 4/10 20,000
2021 300,000 3/10 15,000
2022 200,000 2/10 10,000
2023 100,000 41/10 5,000
1,000,000 50,000
if the statement of financial position is prepared on december 31, 2020. the curremt portion of the
notes recievable is classified as current asset
Note receivable-current portion 100,000
Unearned interest income (15,000)
Carrying amount or amortized cost 85,000
Total unearned interest income 50,000
Realized in 2020 (20,000)
Balance-December 31, 2020 30,000
Realizable in 2021-current portion 15,000
Realizable beyond 2021-noncurrent portion 15,000
Total 30,000
the non current portion of the notes recievable is classified as non current assets
Notes recievable- non current portion 200,000

Unearned interest income (15,000)
Carrying amount 185,000
2.
Notes receivable 400,000
Sales 350,000
Unearned interest income 50,000
to record the first installment

Cash 100,000
Notes receivable 100,000
Unearned interest income 20,000

Interest income 20,000

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Carmina Sanchez

Accounts receivable, Jan 1 P 1,300,000

Accounts recievable, December 31 1,825,000

3. Hope Company provided the following information relating to current operations:

Required: Compute for the following:

Gross Sales 12,600,000

3. Accounts receivable, December 31

Accounts Receivable, December 31 6,200,000

Required: Compute for the following:

1. Net selling price

Net Selling price 7,250,000

Carrying amount 6,250,000

Interest income, 2019 500,000

Carrying amount, December 2019, 5,750,000

Face value of note 400,000

NOTES RECIEVABLE fraction interest income

2020 400,000 4/10 20,000

2021 300,000 3/10 15,000

2022 200,000 2/10 10,000

2023 100,000 41/10 5,000

Notes recievable- non current portion 200,000

to record the first installment

Unearned interest income 20,000

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