Problem 1.

The following long-term receivables were reported in the December 31, 2011, statement of financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate 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 P1,000,000
plus interest on the unpaid balance every April 1. The initial principal and interest payment was made on April 1, 2012.
.

b. The note receivable from officer is dated December 31, 2011, earns interest at 10% per annum, and is due on December 31, 2014.
The 2012 interest was received on December 31, 2012.
.

c. Mango sold a piece of equipment to Banana Inc., on April 1, 2012, in exchange for a P400,000 non-interest bearing note due on April
1, 2014. 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, 2012 was 12%. The present value factor of 1 for two periods at 12% is .0797.
.

d. A tract of land was sold by Mango to Orange, Inc., on July 1, 2012, for P2,000,000 under an installment sale contract. Orange signed a
4-year 11% note for P1,400,000 on July 1, 2012, in addition to the down payment of P600,000. The equal annual payments of principal
and interest on the note will be P452,250 payable on July 1, 2013, 2014, 2015 and 2016. The land had an established cash price of
P2,000,000 and its cost to Mango was P1,500,000. The collection of the installments on this note is reasonably assured.
.
1. The amount to be reported as noncurrent receivables in the statement of financial position at December 31, 2012 is ________
2. The current portion of notes receivable on December 31, 2012 should be __________
3. The accrued interest receivable on December 31, 2012 should be ________
4. On December 31, 2012 the unamortized discount on the note receivable from sale of equipment should be ____________
5. The total interest income for the year ended December 31, 2012 should be _________
NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec.31,2012 (3M-1M) P2,000,000
Less: Installment due Apr.01,2013 (1,000,000) P1,000,000
Problem 1. The following long-term receivables were reported in the December 31, 2011,
statement of financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate 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 P1,000,000 plus interest on the unpaid balance every
April 1. The initial principal and interest payment was made on April 1, 2012.

b. The note receivable from officer is dated December 31, 2011, earns interest at 10% per
annum, and is due on December 31, 2014. The 2012 interest was received on December 31,
2012.
1. NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec.31,2012 (3M-1M) P2,000,000
Less: Installment due Apr.01,2013 (1,000,000) P1,000,000
B. N/R from Officer due Dec 31,2014 800,000
Problem 1. The following long-term receivables were reported in the December 31, 2011, statement of
financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate to the company’s long-term receivables:
c. Mango sold a piece of equipment to Banana Inc., on April 1, 2012, in exchange for a P400,000 non-
interest bearing note due on April 1, 2014. 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, 2012 was
12%. The present value factor of 1 for two periods at 12% is .0797.

d. A tract of land was sold by Mango to Orange, Inc., on July 1, 2012, for P2,000,000 under an installment
sale contract. Orange signed a 4-year 11% note for P1,400,000 on July 1, 2012, in addition to the down
payment of P600,000. The equal annual payments of principal and interest on the note will be P452,250
payable on July 1, 2013, 2014, 2015 and 2016. The land had an established cash price of P2,000,000 and
its cost to Mango was P1,500,000. The collection of the installments on this note is reasonably assured.
1. NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec.31,2012 (3M-1M) P2,000,000
Less: Installment due Apr.01,2013 (1,000,000) P1,000,000
B. N/R from Officer due Dec 31,2014 800,000
C. N/R from sale of Equipment:
Carrying amount on April 1, 2012 318,800
Add: Interest Income (38,256 x 9/12) 28,692 347,492

Non-interest bearing note= P400,000

PV factor for 2 years= 0.797
Prevailing interest rate= 12%

Date Interest Income Unearned Interest Present Value

April 01, 2012 81,200 318,800
April 01, 2013 38,256 42,944 357,056
April 01, 2014 42,847 97 399,903
1. NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec.31,2012 (3M-1M) P2,000,000
Less: Installment due Apr.01,2013 (1,000,000) P1,000,000
B. N/R from Officer due Dec 31,2014 800,000
C. N/R from sale of Equipment:
Carrying amount on April 1, 2012 318,800
Add: Interest Income (38,256 x 9/12) 28,692 347,492

Non-interest bearing note= P400,000

PV factor for 2 years= 0.797
Prevailing interest rate= 12%
Date Interest Income Unearned Interest Present Value
April 01, 2012 81,200 318,800
*28,692 52,508 347,492
April 01, 2013 9,564 42,944 357,056
*32,135 10,809 389,191
April 01, 2014 10,712 97 399,903
Problem 1. The following long-term receivables were reported in the December 31, 2011, statement of
financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate to the company’s long-term receivables:
c. Mango sold a piece of equipment to Banana Inc., on April 1, 2012, in exchange for a P400,000 non-
interest bearing note due on April 1, 2014. 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, 2012 was
12%. The present value factor of 1 for two periods at 12% is .0797.

d. A tract of land was sold by Mango to Orange, Inc., on July 1, 2012, for P2,000,000 under an installment
sale contract. Orange signed a 4-year 11% note for P1,400,000 on July 1, 2012, in addition to the down
payment of P600,000. The equal annual payments of principal and interest on the note will be P452,250
payable on July 1, 2013, 2014, 2015 and 2016. The land had an established cash price of P2,000,000 and
its cost to Mango was P1,500,000. The collection of the installments on this note is reasonably assured.
1. NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec 31,2012 (3M-1M) P2,000,000
Less: Installment due Apr 01,2013 (1,000,000) P1,000,000
B. N/R from Officer due Dec 31,2014 800,000
C. N/R from sale of Equipment:
Carrying amount on April 1, 2012 318,800
Add: Interest Income (38,256 x 9/12) 28,692 347,492
D. N/R from sale of tract of land:
Carrying amount on Dec 31,2012 1,400,000
Less: Installment due in July 1, 2013
Collection 452,250
Less: Interest Inc. (154,000) (298,250) 1,101,750

Date Collections Interest Income Amortization Present Value

July 1, 2012 1,400,000
July 1, 2013 452,250 154,000 298,250 1,101,750
July 1, 2014 452,250 121,193 331,058 770,693
July 1, 2015 452,250 84,776 367,474 403,219
July 1, 2016 452,250 44,354 407,896 (4,677)
1. NONCURRENT RECEIVABLES (DECEMBER 31, 2012)
A. N/R from sale of plant:
Carrying Amount on Dec 31,2012 (3M-1M) P2,000,000
Less: Installment due Apr 01,2013 (1,000,000) P1,000,000
B. N/R from Officer due Dec 31,2014 800,000
C. N/R from sale of Equipment:
Carrying amount on April 1, 2012 318,800
Add: Interest Income (38,256 x 9/12) 28,692 347,492
D. N/R from sale of tract of land:
Carrying amount on Dec 31,2012 1,400,000
Less: Installment due in July 1, 2013
Collection 452,250
Less: Interest (154,000) (298,250) 1,101,750
TOTAL NONCURRENT RECEIVABLES ON DEC 31, 2012: P3,249,242
Problem 1. The following long-term receivables were reported in the December 31, 2011, statement of financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate 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 P1,000,000
plus interest on the unpaid balance every April 1. The initial principal and interest payment was made on April 1, 2012.
.

b. The note receivable from officer is dated December 31, 2011, earns interest at 10% per annum, and is due on December 31, 2014.
The 2012 interest was received on December 31, 2012.
.

c. Mango sold a piece of equipment to Banana Inc., on April 1, 2012, in exchange for a P400,000 non-interest bearing note due on April
1, 2014. 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, 2012 was 12%. The present value factor of 1 for two periods at 12% is .0797.
.

d. A tract of land was sold by Mango to Orange, Inc., on July 1, 2012, for P2,000,000 under an installment sale contract. Orange signed a
4-year 11% note for P1,400,000 on July 1, 2012, in addition to the down payment of P600,000. The equal annual payments of principal
and interest on the note will be P452,250 payable on July 1, 2013, 2014, 2015 and 2016. The land had an established cash price of
P2,000,000 and its cost to Mango was P1,500,000. The collection of the installments on this note is reasonably assured.
.
1. The amount to be reported as noncurrent receivables in the statement of financial position at December 31, 2012 is ________
2. The current portion of notes receivable on December 31, 2012 should be __________
3. The accrued interest receivable on December 31, 2012 should be ________
4. On December 31, 2012 the unamortized discount on the note receivable from sale of equipment should be ____________
5. The total interest income for the year ended December 31, 2012 should be _________
2. CURRENT PORTION - NONCURRENT RECEIVABLES
A. N/R from sale of plant: P1,000,000
B. N/R from sale of tract of land:
Installment due in July 1, 2013
Collection 452,250
Less: Interest (154,000) 298,250
CURRENT PORTION - RECEIVABLES: P1,298,250
Problem 1. The following long-term receivables were reported in the December 31, 2011, statement of financial position of Mango corp.:
Note Receivable from sale of plant P3,000,000
Note receivable from officer 800,000

The following transactions during 2012 and other information relate 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 P1,000,000
plus interest on the unpaid balance every April 1. The initial principal and interest payment was made on April 1, 2012.
.

b. The note receivable from officer is dated December 31, 2011, earns interest at 10% per annum, and is due on December 31, 2014.
The 2012 interest was received on December 31, 2012.
.

c. Mango sold a piece of equipment to Banana Inc., on April 1, 2012, in exchange for a P400,000 non-interest bearing note due on April
1, 2014. 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, 2012 was 12%. The present value factor of 1 for two periods at 12% is .0797.
.

d. A tract of land was sold by Mango to Orange, Inc., on July 1, 2012, for P2,000,000 under an installment sale contract. Orange signed a
4-year 11% note for P1,400,000 on July 1, 2012, in addition to the down payment of P600,000. The equal annual payments of principal
and interest on the note will be P452,250 payable on July 1, 2013, 2014, 2015 and 2016. The land had an established cash price of
P2,000,000 and its cost to Mango was P1,500,000. The collection of the installments on this note is reasonably assured.
.
1. The amount to be reported as noncurrent receivables in the statement of financial position at December 31, 2012 is ________
2. The current portion of notes receivable on December 31, 2012 should be __________
3. The accrued interest receivable on December 31, 2012 should be ________
4. On December 31, 2012 the unamortized discount on the note receivable from sale of equipment should be ____________
5. The total interest income for the year ended December 31, 2012 should be _________
2. CURRENT PORTION - NONCURRENT RECEIVABLES
A. N/R from sale of plant: P1,000,000
B. N/R from sale of tract of land:
Installment due in July 1, 2013
Collection 452,250
Less: Interest (154,000) 298,250
CURRENT PORTION - RECEIVABLES: P1,298,250

3. ACCRUED INTEREST RECEIVABLE

A. N/R from sale of plant:
(2M x 12% x 9/12) P180,000
B. N/R from sale of tract of land:
(1.4M x 11% x 6/12) 77,000
TOTAL ACCRUED INTEREST RECEIVABLE: P1,298,250
4. UNAMORTIZED DISCOUNT OF N/R FROM SALE OF EQUIPMENT
Unearned Interest (400,000-318,800) P81,200
Less: Amortization(38,256 x 9/12) (28,692)
P52,508
4. UNAMORTIZED DISCOUNT OF N/R FROM SALE OF EQUIPMENT
Unearned Interest (400,000-318,800) P81,200
Less: Amortization(38,256 x 9/12) (28,692)
P52,508

5. INTEREST INCOME
Notes receivable from sale of plant:
Interest Income, Jan. 1- Mar. 31 P90,000
Interest Income, Apr. 1- Dec. 31 180,000
Total: 270,000
Notes receivable from officer 80,000
Notes receivable from equipment 28,692
Notes receivable from sale of land 77,000
TOTAL: P455,692