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  • LATIHAN-39-BARADDOCK Inc.

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    Amel Gp
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    1) Braddock Inc. had various long-term receivable balances as of December 31, 2019 including a $1,500,000 note receivable from New York Company bearing interest at 9% due in installments until 2012, a $400,000 note receivable from the president of Braddock bearing interest at 9% due in full in 2012, and a $100,000 zero-interest note receivable from Pennsylvania Company due in full in 2012. 2) During 2010, Braddock sold land to Splinter Company for $200,000 under a 4-year installment contract bearing interest at 12% and all interest and installment payments due from debtors were made on time. 3)

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    1) Braddock Inc. had various long-term receivable balances as of December 31, 2019 including a $1,500,000 note receivable from New York Company bearing interest at 9% due in installments until 2012, a $400,000 note receivable from the president of Braddock bearing interest at 9% due in full in 2012, and a $100,000 zero-interest note receivable from Pennsylvania Company due in full in 2012. 2) During 2010, Braddock sold land to Splinter Company for $200,000 under a 4-year installment contract bearing interest at 12% and all interest and installment payments due from debtors were made on time. 3)

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    11 views1 page

    LATIHAN-39-BARADDOCK Inc.

    Uploaded by

    Amel Gp
    1) Braddock Inc. had various long-term receivable balances as of December 31, 2019 including a $1,500,000 note receivable from New York Company bearing interest at 9% due in installments until 2012, a $400,000 note receivable from the president of Braddock bearing interest at 9% due in full in 2012, and a $100,000 zero-interest note receivable from Pennsylvania Company due in full in 2012. 2) During 2010, Braddock sold land to Splinter Company for $200,000 under a 4-year installment contract bearing interest at 12% and all interest and installment payments due from debtors were made on time. 3)

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    ;ii P7-1O {Comprehensive llcceivables Prnblem} Bradrlock Inc. had thrr follorving lon11^turrn
    ae{ouat balances af Decemlrct 3X,2fifi9,
    t',i33:xf3
    ffil3 ffi:rffi lllr ffiyd'ivision
    Transac{iorrs during 2010 and other itformation relating to Braddcck's long-terrn receivables llrere a$
    f<rllows.
    l, T?,re $1,5G0,S$0 note receivable is dated lllay 1, Z0}g,beaw interest at 9?*, and repressnts the bal-
    aace of the *onsideration re*eived frorn the sale of Braddoek's electyonics division tn New York
    C*mpany. Prineipal payments of 5500,Sffi plus appropriate interest are due on May 1,2810,201L,
    and 201?" The first principal and interest paym€rlt was made on May 1,2010, Collection of the note
    irstallmerrts is reasonably assured.
    2, The $4ffi,00$ note receivable is dated December 37, 2A89, bears inierest at 9Yr,, and is due on
    Ilecember 31, 2012. The note is due from Sean May, president of Braddock Inc" and i* eoll*teraltzed,
    by 10,00S of Eraddsck s ordinary shares. Interest is payable ann-ually on December 31, and all
    interest payments wer+ paid on their due dates through December 3'1,2810. The quoted market
    priee of tsraddoclCs ordinary shares n'as 945 per share sn Decembar 31,2010.
    3. On April 1,2*10, Braddock sold a patenf to Pennsylvania Company in exchange for a gltX],000
    zerc-int*rest&earing note due on April 1, 2A12. There was no established exchange price {or the
    patent, and the note had no ready market. The prevailing rate of interest for a note of this type at
    April 1,2$1& was 12{' The pr€sent value of $1 for trllo periods at. 12% is A.797 {use this faitrx}.
    ?he patent had a carryin6 value of 940,000 at January l, Z8l0, and the amortization fin the year
    eaded Deceraber 31, 201CI, would have been $&000. The collectisn of the note receirable from Penn-
    sylvania is reasonab$r aes{rred,
    *. On |uty 1,2*'1,8, Braddock sotrd a parcel of land to Splinter Cornpany for 92ffi,0fi0 under an insfall-
    ment sale contract. $plinter made a $60,$S0 cash dotra paym€nt on ]uly 1,2fr10, and *igned a
    4*year 117a note for the $14O000 balance. The equal annual payments of principal and intcrest on
    the rrote will be W,125 payable nn July 1,2f311, through luly 1,2014. Tire land could have been
    soill at an established cish price af $200,000. The cost of ihe trand to Braddock was 9150,000.
    eircumetanees are such thaf the collectisn of the installment$ on the ncte ia reasonably assrrred.
    it':tiu;*tir;iir
    {a} Frepare the long-term receivablcs sectkm of Braddock's statement of financial position at December
    31,2fi10"
    {bi Prepare a schedule showiag the eurrent portioa of the long-tetm reeeivables and accnred interest
    receicrable that urould app*ar inBradder:U$ statement of financial position at December 31, 2010.
    {c} Prepare a sf,hedule showing inferest re1/eilue from the long:texnr receivables that would appear
    on Braddoek's dncnrne stateme$t for thc year ended Decernber 31,201A,

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