Prepare the long-term receivables section of Flint’s balance sheet at December 31, 2020.
Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Flint’s balance sheet at December 31, 2020.
Prepare a schedule showing interest revenue from the long-term receivables that would appear on Flint’s income statement for the year ended December 31, 2020.
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Part a | |||
9% note receivable from sale of division, due | |||
in annual installments of $600,000 to | |||
May 1, 2021, less current installment | Working-1 | $ 600,000 | |
8% note receivable from officer, due Dec. 31, | |||
2022, collateralized by 11,630 shares | |||
of Braddock, Inc., common stock | |||
with a fair value of $46 | $ 465,200 | ||
Zero-interest-bearing note from sale of patent, | |||
net of 12% imputed interest, due April 1, 2022 | Working-2 | $ 99,904 | |
Installment contract receivable, due in annual | |||
installments of $45,125 to July 1, 2023, | |||
less current installment | Working-3 | $ 110,275 | |
Total long-term receivables | $ 1,275,379 | ||
Part b | |||
Current portion of long-term receivables: | |||
Note receivable from sale of division | Working-1 | $ 600,000 | |
Installment contract receivable | Working-3 | $ 29,725 | |
Total current portion of long-term receivables | $ 629,725 | ||
Accrued interest receivable: | |||
Note receivable from sale of division | Working-4 | $ 72,000 | |
Installment contract receivable | Working-5 | $ 7,700 | |
Total accrued interest receivable | $ 79,700 | ||
Part c | |||
Interest income: | |||
Note receivable from sale of division | Working-6 | $ 126,000 | |
Note receivable from sale of patent | Working-2 | $ 8,249 | |
Note receivable from officer | Working-7 | $ 37,184 | |
Installment contract receivable from sale of land | Working-5 | $ 7,700 | |
Total interest income for year ended 12/31/20 | $ 179,133 | ||
Working-1 | |||
Long-term Portion of 9% Note Receivable at 12/31/20 | |||
Face amount, 5/1/19 | $ 1,800,000 | ||
Less: Installment received 5/1/20 | $ 600,000 | ||
Balance, 12/31/20 | $ 1,200,000 | ||
Less: Installment due 5/1/201 | $ 600,000 | ||
Long-term portion, 12/31/21 | $ 600,000 | ||
Working-2 | |||
Zero-interest-bearing Note, Net of Imputed Interest | |||
at 12/31/20 | |||
Face amount 4/1/20 | $ 115,000 | ||
Less: Imputed interest | |||
[$115,000 – ($115,000 X 0.797)] | $ 23,345 | ||
Balance, 4/1/19 | $ 91,655 | ||
Add: Interest earned to 12/31/20 | |||
($91,655 X 12% X 9/12) | $ 8,248.95 | ||
Balance, 12/31/20 | $ 99,904 | ||
Working-3 | |||
Long-term Portion of Installment Contract | |||
Receivable at 12/31/20 | |||
Contract selling price, 7/1/120 | $ 200,000 | ||
Less: Down payment, 7/1/20 | $ 60,000 | ||
Balance, 12/31/20 | $ 140,000 | ||
Less: Installment due, 7/1/21 | |||
[$45,125 – ($140,000 X 11%)] | $ 29,725 | ||
Long-term portion, 12/31/20 | $ 110,275 | ||
Working-4 | |||
Accrued Interest—Note Receivable | |||
Interest accrued from 5/1 to 12/31/20 | |||
($1,200,000 X 9% X 8/12) | $ 72,000 | ||
Working-5 | |||
Accrued Interest—Installment Contract at 12/31/20 | |||
Interest accrued from 7/1 to 12/31/20 | |||
($140,000 X 11% X 1/2) | $ 7,700 | ||
Working-6 | |||
Interest Revenue—Note Receivable for 2020 | |||
Interest earned from 1/1 to 5/1/2019 | |||
($1,800,000 X 9% X 4/12) | $ 54,000 | ||
Interest earned from 5/1 to 12/31/19 | |||
($1,200,000 X 9% X 8/12) | $ 72,000 | ||
Interest income | $ 126,000 | ||
Working-7 | |||
Interest Revenue—Note Receivable, Officer, for 2020 | |||
Interest earned 1/1/ to 12/31/19 | |||
($465,200 X 8%) | $ 37,184 |
Prepare the long-term receivables section of Flint’s balance sheet at December 31, 2020. Prepare a schedule...
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