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Midterm Answer Key IA1

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Clyde Saladaga
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38 views4 pages

Midterm Answer Key IA1

Uploaded by

Clyde Saladaga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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PROBLEM 1

Principal amount 5,000,000


Direct origination cost 39,400
Loan origination fee -400,000
Carrying amount, 1/1/2020 4,639,400

PV of note @ 11% @ 5 periods


PV of principal (P5,000,000 x 0.5935) 2,967,500
PV of interest (P5,000,000 x 10% x 3.6959) 1,847,950
4,815,450

PV of note at 12% (2)


PV of principal (P5,000,000 x 0.5674) 2,837,000
PV of interest (P5,000,000 x 10% x 3.6048) 1,802,400
4,639,400

PROBLEM 2
Proceeds (P1,000,000 x 0.712) 712,000 711,800
Carrying amount of equipment 800,000 800,000
Loss on sale of equipment -88,000 -88,200 1

Carrying amount of note 712,000


Interest rate 12%
Interest income 85,440.00 2

PROBLEM 3
Accounts receivable, beginning 500,000 Less than 60 days
Credit sales 3,120,000 61-12o days
Collections -3,008,000 121-180 days
Write-off -52,000 Over 180 days
560,000
Additional writeoff -11,200
Accounts receivable, end 548,800 1

A/R, beginning 500,000


Credit sales 3,120,000
Collections -3,008,000
Write-off -52,000
Recovery 2,160
Collection -2,160
560,000 11,200

A/R, beginning 500,000 Less than 60 days


Credit sales 3,120,000 61-12o days
Collections -3,008,000 121-180 days
Write-off -52,000 Over 180 days
Recovery (reestablishment of A/R) 2,160
562,160
Additional write-off 11,243.20
Accounts receivable, 12/31/2020 550,916.8 1

AFDA, beginning 48,000


Writeoff -63,200
Recovery 2,160
Doubtful accounts 64,000 3
AFDA, end 50,960

AFDA, beginning 48,000.00


Writeoff (63,243.20)
Recovery 2,160.00
Doubtful accounts 64,240.00 3
AFDA, end 51,156.56

A/R, end 548,800


AFDA -50,960
Carrying amount of A/R 497,840 4

A/R, end 550,916.80 550,917


AFDA -51,157.00 -51,157
Carrying amount of A/R 499,759.80 499,760
499,760
Date EI (12%) NI (10%) Amortization Carrying Amount
1/1/2020 4,639,400
12/31/2020 556,728 500,000 56,728 4,696,128 1
12/31/2021 563,535 500,000 63,535 4,759,663
12/31/2022 571,160 500,000 71,160 4,830,823
12/31/2023 579,699 500,000 79,699 4,910,522 4
12/31/2024 589,478 500,000 89,478 5,000,000

712,000 711,800
y1 85,440 797,440 797,216
y2 95,692.80 95,693 893,132.80 891,882
y3 106,867.20 4 1,000,000 1,000,000

108,118

560,000 Required allowance


70% 2% 392,000.00 7,840.00
18% 15% 100,800.00 15,120.00
10% 50% 56,000.00 28,000.00
2% 0% 11,200.00
560,000.00 50,960.00 2
562,160 Required allowance
Less than 60 days 70% 2% 393,512.00 7,870.24
61-12o days 18% 15% 101,188.80 15,178.32
121-180 days 10% 50% 56,216.00 28,108.00
Over 180 days 2% 0% 11,243.20
562,160.00 51,156.56 2

51,1

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