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On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000.   The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%.   Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.)   1. Current portion of the notes receivable   2. Non current portion of the notes receivable

On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000.   The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%.   Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.)   1. Current portion of the notes receivable   2. Non current portion of the notes receivable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000.

 

The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%.

 

Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.)

 

1. Current portion of the notes receivable

 

2. Non current portion of the notes receivable

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