PROBLEM 1

Y0 Y1 Y2 Y3
2,000,000.00 2,000,000.00 2,000,000.00
Present Valu 6,074,698.69 1,271,036.16 1,423,560.50 1,594,387.76
Collections 2,000,000.00 2,000,000.00 2,000,000.00
Interest 728,963.84 576,439.50 405,612.24
Amortization 1,271,036.16 1,423,560.50 1,594,387.76
Present Value 4,803,662.54 3,380,102.04 1,785,714.29

Y0 Cash 500,000.00
Notes Receivable 6,074,698.69
Interest Receivable 1,925,301.31
Sales 6,574,698.69
Accrued Interest 1,925,301.31

Y1 Cash 2,000,000.00
Notes Receivable 1,271,036.16
Interest Receivable 728,963.84

Y2 Cash 2,000,000.00
Notes Receivable 1,423,560.50
576,439.50

Y3 Cash 2,000,000.00
Notes Receivable 1,594,387.76
405,612.24

Y4 Cash 2,000,000.00
Notes Receivable 1,785,714.29
214,285.71
 ### 1. How much is the interest income in 20x1?
Y4 2. How much Is the current portion of the receivable on December 31 20
2,000,000.00 3. How much is the carrying amount of the receivable on December 31 2
1,785,714.29
2,000,000.00
214,285.71
1,785,714.29
-
 728,963.84
receivable on December 31 20x1? 1,271,036.16
e receivable on December 31 20x2? 3,594,387.76
PROBLEM 2

Y0 Y0.5 Y1 Y1.5 Y2
350,000.00 350,000.00 350,000.00 350,000.00
Present Valu 1,776,492.22 261,175.39 274,234.16 287,945.87 302,343.16
Collections 350,000.00 350,000.00 350,000.00 350,000.00
Interest 88,824.61 75,765.84 62,054.13 47,656.84
Amortization 261,175.39 274,234.16 287,945.87 302,343.16
Present Value 1,515,316.83 1,241,082.68 953,136.81 650,793.65

1. How much is the interest income in 20x1? 164,590.45

2. How much is the carrying amouunt of the receivable on December 31, 20 940,289.03
 Y0 Notes Receivable
Interest Receivable
Y2.5 Y3 Sales
350,000.00 350,000.00 Accrued Interest
317,460.32 333,333.33
350,000.00 350,000.00 Y0.5 Cash
32,539.68 16,666.67 Notes Receivable
317,460.32 333,333.33 Interest Receivable
333,333.33 -
Y1 Cash
Notes Receivable
Interest Receivable

Y1.5 Cash
Notes Receivable
Interest Receivable

Y2 Cash
Notes Receivable
Interest Receivable

Y2.5 Cash
Notes Receivable
Interest Receivable

Y3 Cash
Notes Receivable
Interest Receivable
1,776,492.22
323,507.78
1,776,492.22
323,507.78

350,000.00
261,175.39
88,824.61

350,000.00
274,234.16
75,765.84

350,000.00
287,945.87
62,054.13

350,000.00
302,343.16
47,656.84

350,000.00
317,460.32
32,539.68

350,000.00
333,333.33
16,666.67
PROBLEM 3

Y0 Y1 Y2 Y3
400,000.00 300,000.00 200,000.00
Present Valu 761,833.21 363,636.36 247,933.88 150,262.96
Collections 400,000.00 300,000.00 200,000.00
Interest 76,183.32 43,801.65 18,181.82
Amortization 323,816.68 256,198.35 181,818.18
Present Value 438,016.53 181,818.18 -

1. How much is the carrying amount of the receivable on December 31, 20x1? 438,016.53
Y0 Notes Receivable 761,833.21
Interest Receivable 138,166.79
Sales 761,833.21
Accrued Interest 138,166.79

Y1 Cash 400,000.00
Notes Receivable 323,816.68
Interest Receivable 76,183.32

Y2 Cash 300,000.00
Notes Receivable 256,198.35
Interest Receivablee 43,801.65

Y3 Cash 200,000.00
Notes Receivable 181,818.18
Interest Receivable 18,181.82
PROBLEM 4

Y0 Y1

Present Value 2,000,000.00 2,125,317.14

Accumulated Interest 400,000.00 274,682.86
Interest 125,317.14 133,169.33

How much is the initial measurement of the receivable?

How much is the carrying amount of the receivable on December 31, 20x1?

Y0 Notes Receivable
Sales

Y1 Interest Receivable
Interest Income

Y2 Interest Receivable
Interest Income

Y3 Interest Receivable
Interest Income

Cash
Notes Receivable
Interest Receivable
 Y2 Y3

2,258,486.47 2,400,000.00
141,513.53 400,000.00
141,513.53 400,000.00

2,000,000.00
2,125,317.14

2,000,000.00
2,000,000.00

125,317.14
125,317.14

133,169.33
133,169.33

141,513.53
141,513.53

2,400,000.00
2,000,000.00
400,000.00