Problem 7

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9

(Comprehensive Receivables Problem)

Braddock Inc. had the following long

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term receivable account balances at

December 31, 2016.

Note receivable from sale of division $1,500,000

Note receivable from offi

cer 400,000

Transactions during 2017 and other information relating to Braddocks long

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term receivables were as follows.

1.

The $1,500,000 note receivable is dated May 1, 2016,

bears interest at 9%, and represents the balance of the

consideration

received from the sale of Braddocks electronics division to New York Company. Principal

payments of $500,000 plus appropriate

interest are due on May 1, 2017, 2018, and 2019. The first

principal

and interest payment was made on May 1,

2017. Collection of the note installments is reasonably assured.

2.

The $400,000 note receivable is dated December 31, 2016, bears interest at 8%, and is due on December 31,

2019. The note

is due from Sean Ma

y, president of Braddock Inc. and is collateralized by 10,000 shares of

Braddocks common stock. Interest

is payable annually on December 31, and all interest payments were

paid on their due dates through December 31,

2017. The quoted market price of Bradd

ocks common stock

was $45 per share on December 31, 2017.

Instructions

a)

Show the balance sheet items that ar

e related to the above two note

receivables for 2016 and 2017.