On December 1, Ken Company established an imprest petty cash fund of P10,000 by writing a check drawn against its general checking account. On December 31, the fund contained the following: Currency and coins P 3,500 Receipts for miscellaneous expenses 2,200 Receipts for office supplies 2,300 Envelope containing contributions of employees 1,200 Receipts for transportation 500 On December 31, Ken Company wrote a check to replenish the fund. The amount of the replenishment check i
1. On December 1, Ken Company established an imprest petty cash fund of P10,000 by writing a check drawn
against its general checking account. On December 31, the fund contained the following:
Currency and coins P 3,500
Receipts for miscellaneous expenses 2,200
Receipts for office supplies 2,300
Envelope containing contributions of employees 1,200
Receipts for transportation 500
On December 31, Ken Company wrote a check to replenish the fund. The amount of the replenishment check is
2. On January 1, 2017, Martian Manhunter Company sold land costing P600,000 and received in exchange a four-
year, with a face amount of P1,000,000 bearing an interest rate of 6%. The stated rate on the note was
determined to be substantially low compared to the prevailing rate for a similar transaction being at 12%. Martian
Manhunter Company uses the calendar year for reporting purposes. What is the discounted value of the note?
3. On August 1, 2017, Marvel company sold land costing P2,200,000 and received in exchange a note with a face
amount of P3,000,000 maturing on August 1, 2020. It bears an interest rate of 12% which approximates the
current interest rates in the market. Marvel Company uses the calendar year for reporting purposes
Gain reported arising from the sale
Interest income for 2017
Note receivable amount reported in December 31, 2017
4. On April 1, 2017, Incredible Hulk Company sold a machine to Banner Enterprises in exchange for a P450,000
non-interest bearing note due on April 1, 2021. There was no established exchange price for the equipment and
the note has no ready market. The prevailing rate of the interest for a note of this type at April 1, 2017 was 12%.
The equipment had a carrying value of P275,000 at the time of sale. The collection of the note from Banner
Enterprises is reasonably assured. Incredible Hulk Company uses the calendar year for reporting purposes
Initial measurement of the notes receivable
Interest income for 2017
Unearned interest as of December 31, 2018
5. On January 1, 2017 Hawkeye Company sold a parcel of land which it has acquired previously for P215,000 and
received in exchange a non-interest bearing note whose face value amounted to P450,000. The note shall be
collected every December 31 as follows: P100,000 in 2017; P150,000 in 2018 and P200,000 in 2019. The
effective interest rate for a similar note was 8%. Hawkeye Company uses the calendar year for reporting
purposes
Gain (loss) on the sale of the land
Interest income for 2017
Note receivable reported in the non-current asset section in the December 31, 2018 statement of financial
position
6. Steve Company factors P3,000,000 of
guarantee) basis on July 1, 2017. The receivable records are transferred to Marium Finance, which will receive
the collections. Marium Finance assesses a service charge of 2% of the factored accounts and retains an amount
equal to 6% of accounts receivable factored to cover sales discounts, returns, and allowances.
Prepare the entries in relation to the receivalbles
The net cash proceeds arising from the factoring of the receivable is
The gain (loss) arising from the factoring of the receivable is
7. Determine the cash proceeds from the following discounted notes.
10-month, 12% note for P6,400,00 dated May 1, 2018, discounted on August 1,2018 at the bank at 15%
1-year, 9% note for P1,800,000 discounted at the bank at 12% after holding the note for 5 months
120-day, non-interest bearing note for P800,000 dated May 16, 2018 was discounted at the bank on June
30,2018 at 12%. (Use 360)
P700,000 note bearing interest at 9% dated January 1, 2017. The note is payable in two equal
installments of P350,000 plus accrued interest on December 31, 2017 and December 31, 2018. The note
was discounted on July 1, 2018
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
