1. On April 1, 2017, Minotaur Company sold goods to a customer and accepted in exchange...

 

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1. On April 1, 2017, Minotaur Company sold goods to a customer and accepted in exchange a promissory note with face amount of P3,000,000 and stated 12% interest payable annually every March 31. The prevailing rate of interest for a note of this type on April 1, 2017 was 9%. The note mature at an annual installment of P750,000 every March 31. Carrying value of the note receivable as of December 31, 2019 is (Use three decimal places for the present value factor) 2. Barr Co. granted a P5,000,000 loan to a client on January 1, 2020. The loan has a 10% stated interest rate payable annually every December 31 beginning December 31,2020. The principal is due in full at maturity on December 31, 2020. The client paid the interest due on December 31, 2020. However, during that time, Barr determined that the borrower is experiencing significant financial difficulty and will have difficulty in making timely payments beginning 2021. The bank projected that the entire principal will be paid at maturity and 4% interest will be paid annually on December 31 of the next three years. The present value of 1 at 10% for three periods is 0.75 and the present value of an ordinary annuity of 1 at 10% for three periods is 2.49. What is the loan impairment loss for 2020? 3. On December 1, 2020, Ling Co. assigned specific accounts receivable totaling P200,000 as collateral on a P150,000, 12% note from BPI. Ling Co. will continue to collect the assigned accounts. In addition to the interest on the note, BPI charged a 5% finance fee deducted in advance on the P150,000 value of the note. The December collections of assigned accounts amounted to P100,000 less cash discounts of P5,000. On December 31, 2020, Ling Co. remitted the collections to the bank. What amount shall be disclosed as equity of Ling Co. in assigned accounts on December 31, 2020? 4. Joy Company received a P40,000 note receivable from a customer on June 30, 2018. The note, along with interest at 6%, is due on April 30, 2019. On September 1, 2018, Joy discounted the note without recourse at BPI. The bank's discount rate is 10%. What amount of cash did the company receive from BPI? 5. On October 1, 2018, Medico Company purchased P2,000,000 face amount 12% bonds for P2,020,000 plus transaction cost of P50,000. Interest is paid semi-annually every January 1 and July 1. At what amount should the investment in bonds be recorded if the company classified it as (1) fair value through profit or loss, (2) fair value through other comprehensive income and (3) amortized cost, respectively? 1. On April 1, 2017, Minotaur Company sold goods to a customer and accepted in exchange a promissory note with face amount of P3,000,000 and stated 12% interest payable annually every March 31. The prevailing rate of interest for a note of this type on April 1, 2017 was 9%. The note mature at an annual installment of P750,000 every March 31. Carrying value of the note receivable as of December 31, 2019 is (Use three decimal places for the present value factor) 2. Barr Co. granted a P5,000,000 loan to a client on January 1, 2020. The loan has a 10% stated interest rate payable annually every December 31 beginning December 31,2020. The principal is due in full at maturity on December 31, 2020. The client paid the interest due on December 31, 2020. However, during that time, Barr determined that the borrower is experiencing significant financial difficulty and will have difficulty in making timely payments beginning 2021. The bank projected that the entire principal will be paid at maturity and 4% interest will be paid annually on December 31 of the next three years. The present value of 1 at 10% for three periods is 0.75 and the present value of an ordinary annuity of 1 at 10% for three periods is 2.49. What is the loan impairment loss for 2020? 3. On December 1, 2020, Ling Co. assigned specific accounts receivable totaling P200,000 as collateral on a P150,000, 12% note from BPI. Ling Co. will continue to collect the assigned accounts. In addition to the interest on the note, BPI charged a 5% finance fee deducted in advance on the P150,000 value of the note. The December collections of assigned accounts amounted to P100,000 less cash discounts of P5,000. On December 31, 2020, Ling Co. remitted the collections to the bank. What amount shall be disclosed as equity of Ling Co. in assigned accounts on December 31, 2020? 4. Joy Company received a P40,000 note receivable from a customer on June 30, 2018. The note, along with interest at 6%, is due on April 30, 2019. On September 1, 2018, Joy discounted the note without recourse at BPI. The bank's discount rate is 10%. What amount of cash did the company receive from BPI? 5. On October 1, 2018, Medico Company purchased P2,000,000 face amount 12% bonds for P2,020,000 plus transaction cost of P50,000. Interest is paid semi-annually every January 1 and July 1. At what amount should the investment in bonds be recorded if the company classified it as (1) fair value through profit or loss, (2) fair value through other comprehensive income and (3) amortized cost, respectively?

Answer rating: 100% (QA)

ANSWERS 1 The carrying value of the note receivable as of December 31 2019 is P3009230 2 The loan im... View the full answer