Oh WTB, I don't know what to think.
Maybe I'm just tired (been studying since 6am) but how is this a yes or no question?
“CACL-0060
On December 31, year 1, Key Co. received two $10,000 noninterest-bearing notes from customers in exchange for services rendered. The note from Alpha Co., which is due in nine months, was made under customary trade terms, but the note from Omega Co., which is due in two years, was not. The market interest rate for both notes at the date of issuance is 8%. The present value of $1 due in nine months at 8% is .944. The present value of $1 due in two years at 8% is .857. At what amounts should these two notes receivable be reported in Key’s December 31, year 1 balance sheet?
Alpha Omega
Yes Yes
Yes No
No Yes
No No”
?
Even their answer seems to think there should be numbers here, right?
“The requirement is to determine the amounts that should be reported for the two notes receivable. Notes that arise from customers in the normal course of business and are due in one year are classified as current liabilities and recorded at their maturity value. Notes that are due in more than one year are classified as long-term liabilities and are recorded at their present value (ASC 310-10-30-2 and 835-30-25-4). This answer is correct because the Alpha note should be recorded at $10,000, and the Omega note should be recorded at its present value of $8,570 (.857 x $10,000).”
CPA (MA, Non-Reporting)
The difference in winning & losing is most often, not quitting - Walt Disney
B - 33, 71, 79!
A - 32, 61, 70, 83!
R - 33, 58, 73, 69, 81!
F - 47, 78! 🙂
After 3 long years, I'm finally DONE!
I could not have done it without NINJA MCQs.
Used: Roger for his Videos, WTB, and NINJA Audio, Notes and Test Bank.
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