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Friday, August 6, 2010

Valix Finacc vol 1 Problem 6-20

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 6-20


May    1   Notes receivable                                                               200,000
                        Accounts receivable                                                                       200,000

           1   Notes receivable                                                              300,000
                        Accounts receivable                                                                       300,000

July  30   Accounts receivable                                              206,000
                         Notes receivable                                                                            200,000
                         Interest income (200,000 x 12% x 90/360)                                            6,000

Aug.   1   Cash                                                                                  306,075
                         Note receivable discounted                                                          300,000
                         Interest income                                                                                 6,075




                 Principal                                                                                                 300,000
                 Interest (300,000 x 12% x 6/12)                                                                   18,000
                 Maturity value                                                                                        318,000
                 Less: Discount (318,000 x 15% x 3/12)                                                         11,925
                 Net proceeds                                                                                         306,075

Sept.   1   Notes receivable                                                             132,000
                        Accounts receivable                                                                       120,000
                        Interest income                                                                                             12,000

         28   Cash                                                                                            210,120
                         Accounts receivable                                                                      206,000
                         Interest income (206,000 x 12% x 60/360)                                            4,120

Oct.   1   Notes receivable                                                              500,000
                         Sales                                                                                               500,000

Nov.  1   Accounts receivable (318,000 + 12,000)                            330,000
                         Cash                                                                                                330,000

               Notes receivable discounted                                           300,000
                         Notes receivable                                                                             300,000

Dec. 30  Cash                                                                                  515,000
                         Notes receivable                                                                             500,000
                         Interest income (500,000 x 12% x 90/360                                            15,000

         31  Cash                                                                                 336,600
                         Accounts receivable                                                                       330,000
                         Interest income (330,000 x 12% x 2/12)                                                            6,600

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