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On January 1,2021, Gale Co. sold delivery equipment costing ₱1,000,000 with accumulated depreciation of ₱150,000 in exchange for a 3-year, ₱1,800,000 noninterest-bearing note receivable due as follows: Expected date of collection Amount of cash flow 31-Dec-2021 ₱1,000,000 31-Dec-2022 600,000 31-Dec-2023 200,000 ₱1,800,000 The prevailing rate of interest for this type of note is 12%. Based on the above data, answer the following: 1. How much is current portion of the note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635 2. How much is the noncurrent portion of note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635

On January 1,2021, Gale Co. sold delivery equipment costing ₱1,000,000 with accumulated depreciation of ₱150,000 in exchange for a 3-year, ₱1,800,000 noninterest-bearing note receivable due as follows: Expected date of collection Amount of cash flow 31-Dec-2021 ₱1,000,000 31-Dec-2022 600,000 31-Dec-2023 200,000 ₱1,800,000 The prevailing rate of interest for this type of note is 12%. Based on the above data, answer the following: 1. How much is current portion of the note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635 2. How much is the noncurrent portion of note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635

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, Gale Co. sold delivery equipment costing ₱1,000,000 with accumulated depreciation of ₱150,000 in exchange for a 3-year, ₱1,800,000 noninterest-bearing note receivable due as follows:

Expected date of collection Amount of cash flow

31-Dec-2021 ₱1,000,000

31-Dec-2022 600,000

31-Dec-2023 200,000 ₱1,800,000

The prevailing rate of interest for this type of note is 12%.

Based on the above data, answer the following:

1. How much is current portion of the note on December 31,2021?

a. ₱600,000 c. ₱83,425

b. ₱516,575 d. ₱178,635

2. How much is the noncurrent portion of note on December 31,2021?

a. ₱600,000 c. ₱83,425

b. ₱516,575 d. ₱178,635

 

 

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