Question

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 due on May 1, 2020, 2021, and 2022. The first principal and interest payment was made on May 1, 2020. Collection of the note installments is reasonably assured. 2. The $491,300 note receivable is dated December 31, 2019, bears interest at 9%, and is due on December 31, 2022. The note is due from Sean May, president of Sweet Inc. and is collateralized by 12,283 shares of Sweet’s common stock. Interest is payable annually on December 31, and all interest payments were paid on their due dates through December 31, 2020. The quoted market price of Sweet’s common stock was $45 per share on December 31, 2020. 3. On April 1, 2020, Sweet sold a patent to Pennsylvania Company in exchange for a $128,000 zero-interest-bearing note due on April 1, 2022. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at April 1, 2020, was 10%. The present value of $1 for two periods at 10% is 0.826 (use this factor). The patent had a carrying value of $51,200 at January 1, 2020, and the amortization for the year ended December 31, 2020, would have been $10,240. The collection of the note receivable from Pennsylvania is reasonably assured. 4. On July 1, 2020, Sweet sold a parcel of land to Splinter Company for $200,000 under an installment sale contract. Splinter made a $60,000 cash down payment on July 1, 2020, and signed a 4-year 9% note for the $140,000 balance. The equal annual payments of principal and interest on the note will be $45,125 payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $200,000. The cost of the land to Sweet was $150,000. Circumstances are such that the collection of the installments on the note is reasonably assured.

Prepare the long-term receivables section of Sweet’s balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,125.)

Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Sweet’s balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,129.)

Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Sweet’s balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,129.)

Answer 1

Please see below step by step and understand compete flow of number . most of the number as per Question ( As per Q represents as per Question ) Or certain number derived as per below detail workings  

Sweet inc		Amount ($)
Note receivable from sale of division		12,00,000
Note received from Officer		4,91,300
Principal Payments		4,00,000
Interest due on - May1. 2020,2021,2022
Interest rate		0
10%Note receivable from Sale of division		4,00,000
9%Note receivable from Officer		4,91,300
Non Interest Bearing note receivable from sale of Patent ( as below)		2,02,152
4 Year 9% Note Receivable ( as per Below Working)		1,72,525
Computation of Long term 10%Note receivable
Face Value 31st Dec 2019 ( a)		12,00,000
Less Installment -1st May 2020(b)		(4,00,000)
Balance (a-b)=c		8,00,000
Less Installment -1st May 2021(d)		(4,00,000)
Balance for long term		4,00,000
Computation of Non Interest bearing receivable
Zero Interest bearing Note( As per Q)-A		1,28,000
Less - Interest rate (B)		22272
('128000-128000*0.826)( PV given in Question
Balance amount (A-B)=c		1,05,728
Interest accrued
('c*10%*9/12)- proportionate calculation of Interest
(105728*10%*9.12)		96423.936
Balance amount		2,02,152
Signed 4 year 9% Note receivable - Long term
Selling price ( as per Q)-A		2,00,000
Less Down payment ( as per Q)-B		(60,000)
Balance amount (A-B)=C		1,40,000
Less - current portion of the Note to account=D		-32525
(45125-9%*140000)
Balance amount (C-D)		1,72,525