CAVITE COMPANY

12/9
GROSS PRICE METHOD
ACCOUNTS RECEIVABLE 213750
SALES 213750

NET PRICE METHOD

ACCOUNTS RECEIVABLE 209475
SALES 209475

ALLOWANCE METHOD
ACCOUNTS RECEIVABLE 213750
ALLOWANCE FOR SALES DISCOUNT 4275
SALES 209475

12/10
GROSS PRICE METHOD:
ACCOUNTS RECEIVABLE 130000
SALES 130000

NET PRICE METHOD:

ACCOUNTS RECEIVABLE 127400
SALES 127400

ALLOWANCE METHOD:
ACCOUNTS RECEIVABLE 130000
ALLOWANCE FOR SALES DISCOUNT 2600
SALES 127400

12/19
GROSS METHOD
CASH 209475
SALES DISCOUNT 4275
ACCOUNTS RECEIVABLE 213750

NET PRICE METHOD

CASH 209475
ACCOUNTS RECEIVABLE 209475

ALLOWANCE METHOD
CASH 209475
ALLOWANCE FOR SALES DISCOUNTS 4275
ACCOUNTS RECEIVABLE 213750

12/26
GROSS PRICE METHOD
ACCOUNTS RECEIVABLE 80000
SALES 80000

NET PRICE METHOD

ACCOUNTS RECEIVABLE 78400
SALES 78400

ALLOWANCE METHOD
ACCOUNTS RECEIVABLE 80000
ALLOWANCE FOR SALES DISCOUNT 1600
SALES 78400

12/31
NET PRICE METHOD
ACCOUNTS RECEIVABLE 2600
SALES DISCOUNT FORFEITED 2600

ALLOWANCE METHOD
ALLOWANCE FOR SALES DISCOUNTS 2600
SALES DISCOUNT FORFEITED 2600

LAGUNA COMPANY

a.) Present Value of Notes Receivable 2020 = 6000000x(1+0.08)^4 = 4410000

multiply: Interest Rate 8%
Interest Revenue of 2020 352800

Present Value of Notes Receivable 2020 = 4410000

Add: Interest Revenue of 2020 = 352800
Total: Present Value of Notes Receivable 2021 = 4762800
multiply: Interest Rate 8%
Total: Interest Revenue of 2021 = 318024

b.) Carrying Value of Note of 2020

Present Value of Note of 2020 = 4410000
Add: Interest Revenue of 2020 = 352800
Total Carrying Value of 2020 = 4762800

Carrying Value of Note 2021

Carrying Value of Note 2020 = 4762800
Mulitply: Interest Rate = 8%
Total: Interest Revenue of 2021 = 381024
Add: Carrying Value Note of 2020 = 4762800
Total = Carrying Value of Note 2021 = 5143824

c.) 2020 = Non-current Asset

2021 = Non-current Asset

Laguna Company

LAND 3,000,000
NOTES RECEIVABLE 6,000,000
INTEREST RATE 8%
ANNUAL INSTALLMENTS 1,500,000 = 4 TIMES

A.)
PRESENT VALUE OF NOTES (PV OF OA)
6,000,000/4 X 1-(1+8%)^-4/8% = 4,968,150

INTEREST REVENUE OF 2020

4,968,150 X 8% = 397452

INTEREST REVENUE OF 2020 = 394,752

LESS:INSTALLMENT OF 2020 = 1,500,000
TOTAL AMORTIZATION = -1,102,548
ADD: PRESENT VALUE OF 2020 = 4,968,150
TOTAL PRESENT VALUE OF 2021 = 3,865,602
MULTIPLY TO THE INTEREST RATE = 8%
INTEREST REVENUE OF 2021 = 309,248

B.) PRESENT VALUE OF 2020 = 4,968,150

LESS: AMORTIZATION OF 2020 = (1,102,548)
TOTAL: CARRYING AMOUNT OF 2021 = 3,865,602

C.) TOTAL CURRENT NON-CURRENT

NR 4,500,000 1,500,000 3,000,000
DISC 634398 309,248 325,150
CA 3,865,602 1,190,752 2,674,850