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    Analysis of Notes Receivable and Related Accounts Yoko

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    CJ alandy
    The document analyzes notes receivable and related accounts for Yoko Corporation as of December 31, 2015. It lists notes receivable from a plant sale, officer, equipment sale, and land sale. The noncurrent receivables totaled $6,500,484. The current portion of long-term receivables was $2,594,500. Accrued interest receivable was $514,000. Total interest income for the year was $911,384.

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    Analysis of Notes Receivable and Related Accounts Yoko

    Uploaded by

    CJ alandy
    431 views3 pages
    The document analyzes notes receivable and related accounts for Yoko Corporation as of December 31, 2015. It lists notes receivable from a plant sale, officer, equipment sale, and land sale. The noncurrent receivables totaled $6,500,484. The current portion of long-term receivables was $2,594,500. Accrued interest receivable was $514,000. Total interest income for the year was $911,384.

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    Auditing Problems

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    The document analyzes notes receivable and related accounts for Yoko Corporation as of December 31, 2015. It lists notes receivable from a plant sale, officer, equipment sale, and land sale. The noncurrent receivables totaled $6,500,484. The current portion of long-term receivables was $2,594,500. Accrued interest receivable was $514,000. Total interest income for the year was $911,384.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    431 views3 pages

    Analysis of Notes Receivable and Related Accounts Yoko

    Uploaded by

    CJ alandy
    The document analyzes notes receivable and related accounts for Yoko Corporation as of December 31, 2015. It lists notes receivable from a plant sale, officer, equipment sale, and land sale. The noncurrent receivables totaled $6,500,484. The current portion of long-term receivables was $2,594,500. Accrued interest receivable was $514,000. Total interest income for the year was $911,384.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 3

    Analysis of notes receivable and related accounts

    The balance sheet of Yoko Corporation reported the following long-term receivables as of
    December 31, 2014:
    Note receivable from sale of plant P6,000,000
    Note receivable from officer 1,600,000
    In connection with your audit, you were able to gather the following transactions during 2015
    and other information pertaining to the company’s long-term receivables:
    a. The note receivable from sale of plant bears interest at 12% per annum. The note is
    payable in 3 annual installments of P2,000,000 plus interest on the unpaid balance every
    April 1. The initial principal and interest payment was made on April 1, 2015.
    b. The note receivable from officer is dated December 31,2014, earns interest at 10% per
    annum, and is due on December 31,2017. The 2015 interest was received on December
    31,2015.
    c. The corporation sold a piece of equipment to Yes, Inc. on April 1, 2015, in exchange for
    an P800,000 non-interest bearing note due on April 1,2017. The note had no ready
    market, and there was no established exchange price for the equipment. The prevailing
    interest rate for a note of this type at April 1, 2015, was 12%. The present value factor of
    1 for two periods at 12% is 0.797.
    d. A tract of land was sold by the corporation to No Co. on July 1, 2015, for P4,000,000
    under an installment sale contract. No Co. signed a 4-year 11% note for P2,800,000 on
    July 1,2015, in addition to the down payment of P1,200,000. The equal annual payments
    of principal and interest on the note will be P902,500 payable on July 1, 2016, 2017,
    2018 and 2019. The land had an established cash price of P4,000,000 and its cost to the
    corporation was P3,000,000. The collection of the installments on this note is reasonable
    assured.
    REQUIRED:
    Determine the following as of and for the year ended December 31,2015:
    1. Noncurrent receivables
    2. Current portion of long-term receivables
    3. Accrued interest receivable
    4. Interest income
    5.
    SOLUTION:

    Requirement No. 1
    Note receivable from sale of plant
    Balance, 12/31/12 (P6,000,000 - P2,000,000) 4,000,00
    0
    Less installment due on April 1, 2013 2,000,00 2,000,00
    0 0
    Note receivable from officer, due 12/31/14 1,600,00
    0
    Note receivable from sale of equipment
    Present value of note, 4/1/12 (P800,000 x 0.797) 637,60
    0
    Discount amortization-2012 (P637,600 x 12% x 9/12) 57,38 694,98
    4 4
    Note receivable from sale of
    land
    Balance, 12/31/12 2,800,00
    0
    Less principal installment due on 7/1/13
    Total amount to be received 902,50
    0
    Less interest (P2,800,000 x 11%) 308,00 594,50 2,205,50
    0 0 0
    Total noncurrent receivables, 12/31/12 6,500,48
    4

    Requirement No. 2
    Note receivable from sale of plant due on 2,000,00
    4/1/13 0
    Note receivable from sale of land (see no. 1) 594,50
    0
    Current portion of long-term receivables 2,594,50
    0

    Requirement No. 3
    Note receivable from sale of plant (P4,000,000 x 12% x 9/12) 360,00
    0
    Note receivable from sale of land (P2,800,000 x 11% x 6/12) 154,00
    0
    Accrued interest receivable, 12/31/12 514,00
    0

    Requirement No. 4
    Note receivable from sale of plant:
    P6,000,000 x 12% x 3/12 180,00
    0
    P4,000,000 x 12% x 9/12 360,00 540,00
    0 0
    Note receivable from officer (P1,600,000 x 160,00
    10%) 0
    Note receivable from sale of equipment (P637,600 x 12% x 57,38
    9/12) 4
    Note receivable from sale of land (P2,800,000 x 11% x 6/12) 154,00
    0
    Total interest income for 2012 911,38
    4

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