Chapter 08 – Receivables
April
18 days (30-12) days
May
31 days
June
30 days
July
31 days
August
10 days
Total
120 days
(b) $40,800 [$40,000 + ($40,000 × 6% × (120/360)]
(c)
Aug. 10
Cash
40,800
Note Receivable
Interest Revenue
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
174. Fill in the blanks related to the characteristics of a promissory note.
1.
The party promising to pay the note is called the ________.
2.
The amount for which the note is written is called the _______ amount.
3.
The date the note is to be paid is the _______ date.
4.
The time between the date when a note is written and the time it must be paid is called the _____ of the note.
ANSWER:
1. maker
2. face
3. maturity or due
4. term
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
175. Determine the due date and amount of interest due at maturity on the following notes:
Chapter 08 – Receivables
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Page 72
Date
Amount
of Note
Rate
Date
Amount
(a)
Mar. 15
$8,000
60 days
9%
_______
_______
(b)
May 1
$12,000
90 days
8%
_______
_______
ANSWER:
(a)
May 14; $120 ($8,000 × 0.09 × 60/360)
(b)
July 30; $240 ($12,000 × 0.08 × 90/360)
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
176. Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account.
Required:
(a)
Determine the due date of the note.
(b)
Determine the maturity value of the note.
(c)
Journalize the entry to record the receipt of the payment of the note at maturity.
ANSWER:
(a)
The due date for the note is December 8, determined as follows:
August (31 – 10)
21 days
September
30 days
October
31 days
November
30 days
December
8 days
Total
120 days
(b)
$185,400 [$180,000 + ($180,000 × 9% × 120/360)]
(c)
Dec.
8
Cash
185,400
Notes Receivable
180,000
Interest Revenue
5,400
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
Copyright Cengage Learning. Powered by Cognero.
Page 73
177. Determine the due date and the amount of interest due at maturity on the following notes:
Date of Note
Face Amount
Interest Rate
Term of Note
(a)
October 1
$21,000
8%
60 days
(b)
August 30
9,000
10%
120 days
(c)
May 30
12,000
12%
90 days
(d)
March 6
15,000
9%
60 days
(e)
May 23
9,000
10%
60 days
ANSWER:
Due Date
Interest
(a)
Nov. 30
$280
[$21,000 × 0.08 × (60/360)]
(b)
Dec. 28
300
[$9,000 × 0.10 × (120/360)]
(c)
Aug. 28
360
[$12,000 × 0.12 × (90/360)]
(d)
May 5
225
[$15,000 × 0.09 × (60/360)]
(e)
July 22
150
[$9,000 × 0.10 × (60/360)]
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
178. Journalize the following transactions for Lucite Company.
November 14 Received a $4,800.00, 90-day, 9% note from Alan Albertson in payment of his account.
December 31 Accrued interest on the Albertson note.
February 12 Received the amount due from Albertson on his note.
Date
Description
Post.
Ref.
Debit
Credit
ANSWER:
Nov. 14
Notes Receivable—Alan Albertson
4,800.00
Accounts Receivable—Alan
Albertson
4,800.00
Chapter 08 – Receivables
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
(b)
Determine the maturity value of the note.
(c)
Journalize the entry to record the receipt of the payment of the note at maturity.
ANSWER:
(a) June 10
determined as:
March
19 days (31 – 12)
April
30 days
May
31 days
June
10 days
Total
90 days
(b)
$81,200 [$80,000 + ($80,000 6% – (90/360)]
(c)
June 10
Cash
81,200
Note Receivable
80,000
Interest Revenue
1,200
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.08–06 – LO: 08–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.12 – Receivables Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:23 PM
DATE MODIFIED:
10/16/2017 5:23 PM
182. Watson Company issued a 60-day, 8% note for $18,000, dated April 5, to Laker Company on account. Assume a
360-day year when calculating interest.
(a)
Determine the due date of the note.
(b)
Determine the maturity value of the note.
(c)
Journalize the entries to record the following:
(1)
Receipt of the note by the payee
(2)
Receipt by the payee of the amount due on the note at maturity. Round answers to the nearest $1.
ANSWER:
(a)
June 4
(b)
$18,240
(c)
Note Receivable—Watson Co.
18,000
Account Receivable—Watson Co.
18,000
Cash
18,240
Note Receivable—Watson Co.
18,000
Interest Revenue
240