Kingbird Inc. had the following long$-$term receivable account balances at December $31,2019.$

Note receivable from sale of division

$$1,800,000$

Note receivable from officer

$425,200$

Transactions during $2020$ and other information relating to Kingbird's long$-$term receivables were as follows.

$1.$The $$1,800,000$ note receivable is dated May $1,2019,$ bears interest at $9\%,$ and represents the balance of the consideration received from the sale of Kingbird's electronics division to New York Company. Principal payments of $$600,000$ plus appropriate interest are due on May $1,2020,2021,$ and $2022.$ The first principal and interest payment was made on May $1,2020.$ Collection of the note installments is reasonably assured.

$2.$The $$425,200$ note receivable is dated December $31,2019,$ bears interest at $8\%,$ and is due on December $31,2022.$ The note is due from Sean May, president of Kingbird Inc. and is collateralized by $10,630$ shares of Kingbird's common stock. Interest is payable annually on December $31,$ and all interest payments were paid on their due dates through December $31,2020.$ The quoted market price of Kingbird's common stock was $$44$ per share on December $31,2020.$

$3.$On April $1,2020,$ Kingbird sold a patent to Pennsylvania Company in exchange for a $$120,000$ zero$-$interest$-$bearing note due on April $1,2022.$ There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at April $1,2020,$ was $11\%.$ The present value of $$1$ for two periods at $11\%$ is $0\mathrm{.}812($use this factor$).$ The patent had a carrying value of $$48,000$ at January $1,2020,$ and the amortization for the year ended December $31,2020,$ would have been $$9,600.$ The collection of the note receivable from Pennsylvania is reasonably assured.

$4.$On July $1,2020,$ Kingbird sold a parcel of land to Splinter Company for $$200,000$ under an installment sale contract. Splinter made a $$60,000$ cash down payment on July $1,2020,$ and signed a $4-$year $10\%$ note for the $$140,000$ balance. The equal annual payments of principal and interest on the note will be $$44,166$ payable on July $1,2021,$ through July $1,2024.$ The land could have been sold at an established cash price of $$200,000.$ The cost of the land to Kingbird was $$150,000.$ Circumstances are such that the collection of the installments on the note is reasonably assured.

Prepare a schedule showing the current portion of the long$-$term receivables and accrued interest receivable that would appear in Kingbird's balance sheet at December $31,2020.($Round answers to O decimal places$)$

KINGBIRD INC.

Selected Balance Sheet Balances

December $31,2020$

Current portion of long$-$term receivables

Note receivable from sale of division $?$

Installment contract receivable $?$

Total current portion of long$-$term receivables $?$

Accrued interest receivable

Note receivable from sale of division $?$

Installment contract receivable $?$

Total accrued interest receivable $?$

Also, please explain how calculate numbers. Thank you.

Answer rating: 100% (QA)

Kingbird Inc Current Portion of LongTerm Receivables and Accrued Interest Receivable Dec 31 2020 1 C... View the full answer