On July 31, 2021, ABC Company borrowed from a bank via issuing a 13.2% note. Transaction costs of P45,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P50,000 was not attributable to credit risk.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 49P

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Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000
On July 31, 2021, ABC INC borrowed from a bank via issuing a 13.2% note. Transaction costs of P45,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P50,000 was not attributable to credit risk.The net effects of the note are the following: P264,500 loss for the 2021 Income Statement and P234,500 loss on the 2021 Statement of Comprehensive Income.1. How much is the interest expense for 2020?
On July 31, 2021, JUNGKOOK Company borrowed from a bank via issuing a 13.2% note. Transaction costs of P45,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P50,000 was not attributable to credit risk.The net effects of the note are the following: P264,500 loss for the 2021 Income Statement and P234,500 loss on the 2021 Statement of Comprehensive Income.1. How much is the face value of the note?
What is the amortized cost of accounts receivable at December 31, 2021?
Kagome Company uses the allowance method of accounting for uncollectible accounts. During 2020, Kagome had charged P800,000 to bad debt expense, and wrote off accounts receivable of P900,000 as uncollectible. What was the decrease in working capital as a result of these entries?
based on its past collection experience, JSC Company provides for bad debt at the rate of 2 percent of netcredit sales. On January 1, 2021, the allowance for doubtful accounts credit balance was P10,000.During 2021, JSC wrote off P18,000 of uncollectible receivables and recovered P5,000 on accounts writtenoff in prior years. If net credit sales for 2021 totaled P1,000,000, the doubtful accounts expense for 2021should be
On February 1, 2020, Norton Company factored receivables with a carrying amount of $300,000 to Koch Company. Koch Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables to cover possible uncollectible accounts. 6.Assume that Norton factored the receivables without recourse. What amount of loss should Norton report on this transaction?a.$0. b.$9,000. c.$15,000. d.$24,000. 7.Assume that Norton factored the receivables with recourse, and the recourse obligation has an estimated fair value of $1,500. What amount of loss should Norton report on this transaction? a.The same amount as the answer to the previous question. b.$1,500 more than the answer to the previous question. c.$1,500 less than the answer to the previous question. d.Some other amount.
During 2021, tesa Company experienced financial difficulties and is likely to default on a P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for P4,100,000 cash payable on January 31, 2022. . What amount should be reported as gain from extinguishment of debt in 2021 balance sheet?
b) At January 1, 2020, the credit balance of Vera Corp's Allowance for Doubtful Accounts was $400,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $80 million, of which 90% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be 0.8% of net credit sales. During 2020, uncollectible receivables amounting to $500,000 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged account receivable, the allowance for doubtful accounts would be properly measured at $525,000. Instructions: Prepare a schedule calculating the balance in Vera Corp's Allowance for Doubtful Accounts at December 31, 2020. Prepare any Journal entry needed at year end to adjust the allowance for doubtful accounts to the required balance.
On January 1, 2022, Cornet Inc. loaned $187,825 to Pact Co. A zero-interest-bearing note (face amount, $250,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2024. The prevailing rate of interest for a loan of this type is 9%. What amount of interest income should Cornet recognize in 2022? $18,783 $16,904 $25,000 $22,500
Lucas Co. provides for bad debt expense at the rate of 1% of sales on account. The allowance for doubtful accounts balance on December 31, 2020 was P17,500. During the year 2021, Lucas wrote off P30,500 of uncollectible receivables and recovered P8,050 of bad debts written in prior years. Assuming that the sales on account for 2021 totaled to P2,000,000, how much will be the allowance for doubtful account balance at December 31, 2021 be? a.P15,050 b. P19,950 c. P45,550 d. P5,000
7) Based on its past collection experience, JSC Company provides for bad debt at the rate of 2 percent of net credit sales. On January 1, 2021, the allowance for doubtful accounts credit balance was P10,000. During 2021, JSC wrote off P18,000 of uncollectible receivables and recovered P5,000 on accounts written off in prior years. If net credit sales for 2021 totaled P1,000,000, the doubtful accounts expense for 2021 should be a. 17,000 b. 20,000 c. 23,000 d. 35,000