Problem 1: K Company has the following data relating to e.

How much is the non-current portion of the note on

accounts receivable for the year ended December 31, 2021: December 31, 2021?
Accounts Receivable, 1/1 325,000 Problem 5: On January 1, 2021, R Company sold land that
Allowance for bad debts, January 1 18,400 originally cost 400,000 to E Company. As payment, E gave R a
Sales during the year, all on accounts, terms: 2,800,000 600,000 note. The note bears interest rate of 8% and is to be
5/10, 3/15, n/30 repaid in three annual installments of 200,000 plus interest on
Cash received from customer during the year 2,260,000 outstanding balance. The first payment is due on December 31,
Accounts written off during the year 17,500 2021. The market price of the land is not reliably determinable.
Sales return and allowance 14,280 The prevailing interest rate for the notes of this type 8%.
An analysis of cash received from customers during the year A. How much is the gain on sale of land?
revealed that 1,140,000 was received from customer availing B. How much is the interest revenue for the year 2021?
the 10-day discount period, 873,000 was received from C. Assume the same facts given in the problem, but the
customer availing the 15-day discount period, 12,000 prevailing rate of interest is 12%. At how much should
represented recoveries of accounts written off, and the balance note be recorded on January 1, 2021?
was received from customers paying beyond discount period. D. Using the same assumption in C, how much is the
K Company’s year-end balance of allowance for bad debts was interest revenue for the year 2021?
estimated to be 5% of the outstanding accounts receivable as E. Using the assumption in C, what is the amortized cost
at December 31, 2021, based on the aging of the accounts. of the receivable on December 31, 2021?
a. Accounts receivable balance at December 31, 2021?
b. Bad debts expense for the year-ended December 31, Problem 6: On January 1, 2021, R Company sold equipment
2021 is? costing 380,000 with accumulated depreciation of 160,000 on
the date of sale. R received as consideration for the sale, a
Problem 2: On January 1, 2021, B Company had accounts 400,000 non-interest-bearing note, due January 1, 2024.
receivable and allowance for bad debts of 360,000 and 12,000, There was no established exchange price for the equipment and
respectively. Sales (all on credit) during 2021, amounted to note had no ready market. The prevailing rate of interest for a
1,800,000. Accounts of 7,500 were written off during the year. note of this type at January 1, 2021 was 10%.
Analysis of B Company’s accounts receivable at December 31, A. In R’s 2021 profit or loss, how much should be reported
2021 revealed the following: as interest revenue?
Age Amount Est. Uncollectible B. What are the notes carrying amount at December 31,
0-60 days 125,000 1% 2021?
C. Assuming that the equipment was sold and note
61-120 days 90,000 3%
described in the problem was received on July 1, 2021,
Over 120 days 100,000 10%
all other data being the same, what is the interest
a. There are no other transaction affecting accounts
revenue for the year ended December 31, 2021?
receivable. How much is the cash collected from
customers during 2021?
Problem 7: On January 1, 2021, B Company sold a piece of
b. What is B’s company bad debts expense for 2021?
equipment that was acquired ten years ago for 350,000. At the
c. The carrying amount/ amortized cost of accounts
time of sale, the equipment had accumulated depreciation of
receivable at December 31, 2021 is?
240,000. B received a non-interest-bearing note for 300,000 in
exchange for the equipment. The note is due on December 31,
Problem 3: On January 1, 2021, J Company sold office
2022. There is no readily available market value for the
equipment with a cost of 1,000,000 and accumulated
equipment, but the current market rate of interest for
depreciation of 150,000 in exchange for a 3-year, 10%
comparable notes is 12%.
2,000,000 note receivables. Principal is due on December 31,
A. How much is the gain on sale of equipment?
2023, but interest is due annually every December 31. The
B. How much is the interest revenue in 2021 and 2022,
prevailing interest rate for this type of note is 12%.
respectively?
Based on the above data, answer the following:
a. How much is the gain or loss on sale of office
equipment in 2021?
b. How much is the interest income for 2021?
c. How much is the carrying amount of the note on
December 31, 2021?
d. How much is the current portion of the note on
December 31, 2021?
e. How much is the noncurrent portion of the note on
December 31, 2021?

Problem 4: On January 1m 2921m S Company sold delivery

equipment costing 1,000,000 with accumulated depreciation of
150,000 in exchange for a 3-year, 1,800,000 non-interest-
bearing note receivable due on December 31, 2023. The
prevailing rate of interest for this type of note is 12%.
Based on the above data, answer the following:
a. How much is the gain or loss on sale of delivery
equipment in 2021?
b. How much is the interest income for 2021?
c. How much is the amount of the note on December 31,
2021?
d. How much is the current portion of the note on
December 31, 2021?