Homework Answers
If interest rates increases then the fair value of the note is also increases. Generally, when fair value increases then the demand for the note in the market increase, thus, it results into the increase of interest rates.
If the note is receivable within a period of 12 months then it is treated as short-term note receivable and it is reported under the current assets section of the balance sheet under assets.
Therefore, the fair value of the receivables increases due to increase in the interest rates.
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Johnson Co. accepts a note receivable from a customer in exchange for some damaged inventory. The...
Riverbed Co. accepts a note receivable from a customer in exchange for some damaged Inventory. The...
Riverbed Co. accepts a note receivable from a customer in exchange for some damaged Inventory. The note requires the customer make semiannual Installments of $41.400 each for 10 years. The first installment begins six months from the date the customer took delivery of the damaged Inventory Riverbed's management estimates that the fair value of the damaged Inventory is $562.640. Click here to view factor tables What interest rate is Riverbed implicitly charging the customer Express the rate as an annual...
Cambria Limited took a $360,000 two-year note receivable from a customer in connection with a major...
Cambria Limited took a $360,000 two-year note receivable from a
customer in connection with a major inventory sale transaction on 1
January 20X5. The note required annual end-of-year interest
payments of 4%, and the principal was due at the end of 20X6.
Assume now that the market interest rate is 8%. Calculate the
present value of the note, and prepare a schedule that shows the
annual interest. (Round time value factor to 5 decimal places and
final answers to the...
Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note...
Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note when an equivalent loan would carry 10% interest. Drebin would record sales revenue on the date of sale equal to: Multiple Choice $50,000. The present value of $50,000 using a 10% interest rate. Zero. The future value of $50,000 using a 10% interest rate. Long-term interest-bearing notes receivable issued at an unrealistically low interest rate will be: Multiple Choice Accounted for on the installment...
Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...
Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $1,200,000 Note receivable from officer 491,300 Transactions during 2020 and other information relating to Sweet’s long-term receivables were as follows. 1. The $1,200,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sweet’s electronics division to New York Company. Principal payments of $400,000 plus appropriate interest are...
Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...
Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Sheffield’s long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sheffield’s electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6. (PV of $1. PVA of S1, and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, assuming that...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6. PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, assuming that...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
Riverbed Co. accepts a note receivable from a customer in exchange for some damaged Inventory. The note requires the customer make semiannual Installments of $41.400 each for 10 years. The first installment begins six months from the date the customer took delivery of the damaged Inventory Riverbed's management estimates that the fair value of the damaged Inventory is $562.640. Click here to view factor tables What interest rate is Riverbed implicitly charging the customer Express the rate as an annual...
Cambria Limited took a $360,000 two-year note receivable from a
customer in connection with a major inventory sale transaction on 1
January 20X5. The note required annual end-of-year interest
payments of 4%, and the principal was due at the end of 20X6.
Assume now that the market interest rate is 8%. Calculate the
present value of the note, and prepare a schedule that shows the
annual interest. (Round time value factor to 5 decimal places and
final answers to the...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6. (PV of $1. PVA of S1, and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, assuming that...
Cambria Limited took a $400,000 two-year note receivable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6. PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, assuming that...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
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