Problem 3-15

* dahil hindi naka indicate sa problem kung ano yung date kung kailan ginawa at kung kailan due yung note, i-assume daw na ngayon yung due
date ng note. Yun yung dahilan kung bakit hindi na hinanap yung present value ng note as of 12/31/2015

ALT 1

PV of note @ 2015 (total amount due): 11,000,000.00

New Principal 9,000,000.00

Interest to be received on 2016 (900,000*8%): 720,000.00

Total amount due on 2017 (9,000,000+720,000): 990,000.00

Computation of New Present Value: Computation of Impairment Loss:

*2016: 720,000.00 *1.10^-1 (0.9091) 654,552.00 PV @ 2015: 11,000,000.00

*2017: 9,720,000.00 *1.10^-2 (0.8264) 8,032,608.00 New PV: 8,687,160.00

Present Value: 8,687,160.00 Impairment Loss: 2,312,840.00

or
Principal(@single
9,000,000.00 *0.8264 7,437,600.00
payment):
Interest (@ordinary
720,000.00 *1.7355 1,249,560.00
annuity)
Present Value: 8,687,160.00

Journal Entry:

Restructured Notes Receivable 9,000,000.00

Impairment Loss - Notes Receivable 2,312,840.00

Notes Receivable 10,000,000.00

Interest Revenue 1,000,000.00

Discount On Restructured NR 312,840.00

ALT 2

PV of note @ 2015 (total amount due): 11,000,000.00

Computation of New Present Value:

Principal Payment Interest Due. Total Amt. Due Present Value Factor

2,000,000.00 800,000.00 2,800,000.00 0.9091 2,545,480.00

2,000,000.00 640,000.00 2,640,000.00 0.8264 2,181,696.00

2,000,000.00 480,000.00 2,480,000.00 0.7513 1,863,224.00

2,000,000.00 320,000.00 2,320,000.00 0.6830 1,584,560.00

2,000,000.00 160,000.00 2,160,000.00 0.6209 1,341,144.00

9,516,104.00
Computation of Impairment Loss:

PV @ 2015: 11,000,000.00

New PV: 9,516,104.00

Impairment Loss: 1,483,896.00

Journal Entry:

Restructured Notes Receivable 10,000,000.00

Impairment Loss - Notes Receivable 1,483,896.00

Notes Receivable 10,000,000.00

Interest Revenue 1,000,000.00

Discount On Restructured NR 483,896.00

ALT 3

PV of note @ 2015 (total amount due) *accrued int. was paid on 12/31/2015 10,000,000.00

Interest to be received on 2016 (10,000,000*7%): 700,000.00

Total amount due on 2017 (10,000,000+700,000): 10,100,000.00

Computation of New Present Value: Computation of Impairment Loss:

*2016: 700,000.00 *1.10^-1 (0.9091) 636,370.00 PV @ 2015: 10,000,000.00

*2017: 10,700,000.00 *1.10^-2 (0.8264) 8,842,480.00 New PV: 9,478,850.00

Present Value: 9,478,850.00 Impairment Loss: 521,150.00

or
Principal(@single
10,000,000.00 *0.8264 8,264,000.00
payment):
Interest (@ordinary
700,000.00 *1.7355 1,214,850.00
annuity)
Present Value: 9,478,850.00

Journal Entry:

Restructured Notes Receivable 10,000,000.00

Impairment Loss - Notes Receivable 521,150.00

Notes Receivable 10,000,000.00

Discount On Restructured NR 521,150.00

ALT 4

PV of note @ 2015 (total amount due): 11,000,000.00

Interest to be received on 2016 (11,000,000*10%): 1,100,000.00

Total amount due on 2017 (11,000,000+1,100,000): 12,100,000.00

*2016: 1,100,000.00 *1.10^-1 (0.9091) 1,000,000.00 PV @ 2015: 11,000,000.00

*2017: 12,100,000.00 *1.10^-2 (0.8264) 10,000,000.00 New PV: 11,000,000.00

Present Value: 11,000,000.00 Impairment Loss: -

or
Principal(@single
11,000,000.00 *0.8264 9,090,909.09
payment):
Interest (@ordinary
1,100,000.00 *1.7355 1,909,090.91
annuity)
Present Value: 11,000,000.00

Journal Entry:

Restructured Notes Receivable 11,000,000.00

Notes Receivable 11,000,000.00

Problem 3-17

Journal Entries:

Accounts Receivable Assigned 800,000.00

Accounts Receivables 800,000.00

Cash 634,000.00

Finance Charges 160,000.00

Notes Payable - Pacific Bank 680,000.00

Cash 300,000.00

Accounts Receivable Assigned 300,000.00

Notes Payable - Pacific Bank 300,000.00

Interest Expense (300000*2%) 6,500.00

Cash 306,500.00

Sales Returns and Allowances 10,000.00

Accounts Receivable Assigned 10,000.00

Notes Payable - Pacific Bank 350,000.00

Interest Expense 3,500.00

Cash 353,500.00
Problem 3-20

Journal Entries:

Cash 684,000.00

Loss from Factoring 80,000.00

Receivable from Financing 36,000.00

Accounts Receivable 800,000.00

Cash 582,000.00

Finance Charges (600000*3%) 18,000.00

Notes Payable 600,000.00

Bad Debts Expense 11,600.00

Allowance for Uncollectible Accounts 11,600.00

Sales Returns and Allowances 1,000.00

Receivable From Factor 1,000.00

Cash 35,000.00

Receivable from Factor 35,000.00

Problem 3-21

a. Accounts Receivable Factored 1,200,000.00

Factoring Fee (1200000*10%) 120,000.00

Factor's Holdback (1200000-120000)*6% 64,800.00

Net Cash Received from Factoring 1,015,200.00

b. Accounts Receivable Assigned 500,000.00

Account Receivable 500,000.00

Cash 380,000.00

Finance Charges 20,000.00

Notes Payable 400,000.00

Cash 350,000.00

Accounts Receivable Assigned 350,000.00

Interest Expense 4,000.00

Cash 350,000.00

Equity:
Acct's Recievable Notes Payable to Equity on assigned
500,000.00 400,000.00 -
Assigned Bal.: Finance Co. Bal.: accounts:
(350,000.00) (346,000.00) -

150,000.00 - 54,000.00 = 96,000.00

c. Face Value 50,000.00

Interest 50000*3% 1,500.00

Maturity Value 51,500.00

Discount MV*10*3/12 or MV*10%*88%60 1,287.50

Cash Proceeds 50,212.50

Problem 3-25

a. Accounts Receivable Factored 2,000,000.00

Factoring Fee 215,000.00

Factor's Holdback (2000000-170000)*5% 85,000.00

Net Cash Received from Factoring (2000000*85%) 1,700,000.00

b.Cash 1,700,000.00

Loss from Factoring 215,000.00

Receivable from factor 85,000.00

Accounts Receivable 2,000,000.00

Sales Returns and allowances 30,000.00

Receivable from financing 30,000.00

Cash 55,000.00

Receivable from factor 55,000.00