1. Which of the following would be classified as trade B.

Measures the time elapsed between cash

receivable? disbursement for inventory and cash collection
A. Amounts due from customers C. Refers to the seasonal variations experienced by
B. Cash dividends receivable business entities
C. Claims in litigation D. Should be used to classify asset and liabilities as
D. Loans to employees current if the cycle is less than one year
2. Which of the following is classified as a financial asset? 9. The most theoretically sound method of accounting for
A. Accounts receivable cash discounts on credit sales is the:
B. Loans payable by the borrower A. Discounted price method
C. Ordinary shares of the issuer B. Gross price method
D. Prepaid expenses C. Net present value method
3. Statement 1: Trade receivables are classified as current D. Nel price method
assets if they are to be collected within one year or within 10. Which of the following methods may not be appropriate
the normal operating cycle, whichever is longer. for estimating bad debt expense?
A. Aging of accounts receivable
Statement 2: Nontrade receivables are classified as B. Percentage of net credit sales
current assets if they are to be collected within one year C. Percentage of outstanding-accounts receivable
or within the normal operating cycle, whichever is D. Percentage of sales
shorter. 11. A method of estimating bad debts that emphasizes asset
A. Both statements are correct. valuation rather than income measurement is the
B. Both statements are incorrect. allowance method based on
C. Only statement i is correct A. Aging of receivables
D. Only statement 2 is correct. B. Direct write-off
4. Accounts receivable appear in the balance sheet: C. Gross credit sales
A. As current assets, combines with cash and cash D. Net credit sales
equivalents. 12. Which method of recording bad debt loss is consistent
B. As current assets, immediately after cash and cash with accrual accounting?
equivalents. A. Allowance method
C. As either current assets or noncurrent assets, B. Direct write-off method
depending on whether the allowance method or the C. Percent of sales method
direct write-off method is used to account for D. Percent of accounts receivable method
uncollectible accounts. 13. Which of the following statement is correct?
D. Only if the balance sheet method of estimating A. An estimate of bad debt expense based upon
uncollectible accounts is used credit sales rather than total sales will likely be
5. Accounts receivable are classified as current assets: more in conformity with the matching principle.
A. Only if convertible into cash within 60 days or B. The net realizable value of the total amount of
sooner accounts receivable is defined as the gross amount
B. Only if convertible into cash within one year. billed to customers less any cash trade discounts.
C. Only if the allowance method is used to estimate C. The primary accounting principle supporting use of
the uncollectible the allowance for doubtful accounts is the cost
D. Whenever the accounts receivable arise from principle.
"normal" sales of merchandise to customers, D. When a specified bad debt which has already been
regardless of the credit terms. written off is later collected, sales revenue is
6. When individual customers' accounts have credit increased by the amount of the recovery.
balances of material amounts, these amounts: 14. Stephen Company, which has an adequate amount in its
A. May be deducted from the debit balance in other Allowance for Doubtful Accounts, writes off as
customers' accounts on the balance sheet. uncollectible an account receivable from a bankrupt
B. May be shown as “credit balances of customers’ customer. This action will:
accounts in the current assets section. A. Have no effect on total current assets
C. Must be reported (or disclosed) separately in the B. Reduce net income for the period
liability section of the balance sheet. C. Reduce the amount of owners' equity
D. Should be omitted from the balance sheet. D. Reduce total current assets
7. The Sales Returns and Allowances account is reported 15. Under allowance method, the entry to recognize bad
as a: debt expense
A. Contra-revenue account on the income statement. A. Decreases current assets
B. Current liability on the balance sheet B. Has no effect on current assets
C. Deduction from accounts receivable on the balance C. Has no effect on net income
sheet D. Increases net income
D. Selling expense on the income statement. 16. Under the direct write-off method, bad debts expense is
8. The normal operating cycle recognized
A. Cannot exceed a period of one year A. As a percentage of net credit sales during the
period
 B. As a percentage of net sales during the period Accounts Receivable. xx
C. As indicated by aging the accounts receivable at
the end of the period
D. As specific accounts receivable are determined to 25. When a note receivable is dishonored, it is debited to
be worthless A. Accounts receivable at face value plus interest and
17. A conceptual shortcoming in the direct write-off method other charges
accounting for uncollectible accounts is that this method B. Accounts receivable at maturity value plus interest
violates the: and other charges
A. Cost principle C. Dishonored note receivable at face plus interest
B. Going-concern assumption and other charges
C. Matching principle D. Dishonored note receivable at face value
D. Realization principle 26. If a note receivable is discounted without recourse
18. The amount of accounts receivable is included in total A. Liability for note receivable discounted should be
receivables with appropriate disclosures when credited
Pledged Assigned Factored B. Note receivable should be credited
A. YES YES YES C. The contingent liability may be disclosed in either a
B. YES YES NO contra receivable or a note to the FS
C. YES NO NO D. The transaction should be accounted for as a
D. NO NO NO borrowing as opposed to a conditional sale
19. The assignor's equity in assigned accounts that is 27. For banks and financial institutions, receivables arise
required to be disclosed in the notes is equal to the primarily from
A. Assigned accounts receivable A. Credit sales.
B. Assigned accounts receivable minus the bank loan B. Deposits
balance C. Loans
C. Bank loan balance D. Withdrawals
D. Bank loan balance minus the assigned accounts 28. Under PAS 39/PFRS 9, a loan receivable is initially
receivable measured at
20. Bike Cycle Shop sells a bicycle to Ed Cruz, a customer A. Fair value less transaction costs that are directly
who uses Express Charge (a national credit card, but not attributable to the acquisition
issued by a bank). In recording this sale, Bruce should B. Fair value plus transaction costs that are directly
record: attributable to the acquisition
A. A cash receipts C. Maturity value less transaction costs that are
B. A small increase in the allowance for doubtful directly attributable to the acquisition
accounts D. Maturity value plus transaction costs that are
C. An account receivable from Ed Cruz directly attributable to the acquisition
D. An account receivable from Express Charge 29. Under PAS 39/PFRS 9, a loan receivable is
21. When accounts receivable are factored without recourse, subsequently measured at
what account does the transferor credit? A. Amortized cost using effective interest method
A. Accounts receivable B. Amortized cost using straight line method
B. Accounts receivable assigned C. Cost
C. Liability D. Fair value
D. Sales 30. Statement 1: Interest bearing long-term receivables shall
22. Which of the following is not a basic form of financing stated at face value.
agreement to obtain cash from accounts receivable?
A. Assigning Statement 2: Non-interest long-term receivables shall be
B. Deferring stated at present value.
C. Factoring
D. Pledging Statement 3: Short-term receivables, interest bearing or
23. Which of the following is a means of using receivables to not, are generally stated at face value.
obtain immediate cash? A. All statements are correct
A. Assignment B. Only statement 1 is correct
B. Factoring C. Only statement 2 is incorrect
C. Pledging D. Only statement 3 is incorrect
D. All of the above
24. What entry format is appropriate if sales returns and
allowances occur on factored accounts?
A. Sales Returns and Allowances xx
Receivable from Factor xx
B. Receivable from Factor xx
Factoring Expense xx
C. Sales Returns and Allowances xx
Factoring expense xx
D. Receivable from Factor xx
 C. P300,000
D. P384,000
ACCOUNTS RECEIVABLE AND ESTIMATION OF BAD 34. Following data are available as of June 30, 2020:
DEBTS
31. On December 31, 2021, the "Receivables account of Purchases of merchandise P900,000
Gusion Company shows a debit balance of P5,950,000. Inventory, June 30, 2020 150,000
Subsidiary details show the following: Goods were sold at 50% above cost,
Accounts receivable P725,000 75% of sales were on account.
Notes receivables 100,000 Estimated bad debts or uncollectible
Installment receivable, normally due 1 year accounts 630
to 2 years 300,000 Collections from charge customers 630,000
Customers' accounts reporting credit
balances arising from sales returns 30,000 The outstanding accounts receivable on June 30, 2020
Advance payments for purchase of were:
merchandise 150,000 A. P200,000p
Cash advances to subsidiary 400,000 B. P213,120
Subscription receivable due in 60 days 15,000 C. P213,750
Claim from insurance company 300,000 D. P220,000
Accrued interest receivable 10,000 35. Layla Inc. had accounts receivable of P200,000 and an
Deposit on contract bids 3,000,000 allowance for doubtful accounts of P8,500 just before
Advances to shareholders
writing off as worthless an account receivable from
(collectible in 2023) 1,000,000
Lesley Company of P1,200. The net realizable values of
the accounts receivable before and after the write off
How much is the amount to be presented as "loans and
were:
receivables under current assets section of the statement of
A. P191, 500 before and P 191,500 after
financial position?
B. P191,500 before and P190,300 after
A. 725,000
C. P200,000 before and P198,800 after
B. 1,125,000
D. P208,500 before and P207,300 after
C. 1,590,000
36. An analysis and aging of the accounts receivable of
D. 1,600,000
Xavier Company at December 31, 2021, revealed the
32. On the December 31, 2021, statement of financial
following:
position of Miya Company, the current receivables
consisted of the following:
Accounts receivable P900,000
Allowance for uncollectible account per
Trade accounts receivable P232,500
books 50,000
Allowance for doubtful accounts (5,000)
Amounts deemed uncollectible 64,000
Claim against shipper for goods lost in
transit (October 2021) 7,500
The net amount of the accounts receivable at December
Selling price of unsold goods sent by Miya
to consignee 65,000 31,2021. should be
Security deposit on lease of warehouse A. 786,000
used for storing inventories 75,000 B. 836,000
Total 375,000 C. 850,000
D. 886,000
What is the amortized cost of Miya's current receivable as of
December 31, 2021? 37. Leomord Company uses the balance sheet approach in
A. 235,000 estimating uncollectible account expense. It has just
B. 300,000 completed an aging analysis of accounts receivable at
C. 310,000 December 31, 2021. This analysis disclosed the
D. 375,000 following information.
33. Bane Company began operations on January 1, 2020.
The following information is available for the year ended Age Group Percentage
December 31, 2020. Total Considered
Uncollectible
Total merchandise purchases P700,000 Not yet due P51:000 1%
Merchandise inventory at 12/31/2020 140,000 1-30 days past due P29,000 3%
Collections from customers 400,000 31-60 days past due P12.000 10%

All merchandise is marked to sell at 40% above cost. What is the appropriate balance for Leomord's Allowance for
Assume that all sales are credit sales and all receivables are Doubtful Accounts at December 31, 2021?
collectible. The balance in accounts receivable at December A. 2% of credit sales in 2021
31, 2020 should be B. 2,070
A. P160,000 C. 2.580
B. P244,000 D. 92,000
 43. Under the estimated bad debts method of recording bad
Use the following data for questions 38 through 41. debts, which of the following entries, if any, would be
made to write off actual uncollectible accounts of
At the end of January, the unadjusted trial balance of P3,500?
Silvanna, Inc., included the following accounts: A. Allowance for Doubtful Accounts… 3,500
Accounts Receivable ……………... 3,500
B. Bad Debt Expense ………………… 3,500
Debit Credit
Allowance for Doubtful Accounts… 3,500
Sales (90% represent credit sales) P800,000
C. Bad Debt Expense ………………… 3,500
Accounts receivable P550.000
Accounts Receivable ……………… 3.500
Allowance for doubtful accounts 4,280
D. No entry is needed
44. Based on the information:
38. Silvanna uses the balance sheet approach in estimating. Sales return and allowances (credit sales)... P 20,000
uncollectible accounts expense, and aging the accounts Cash sales …………………………………… 1,200,000
receivable indicates the estimated uncollectible portion Unadjusted balance in allowance for
to be P16,600. What is the amount of uncollectible doubtful accounts ……………………… 1,000 credit
Credit sales …………………………………... 2,550,000
accounts expense recognized in Silvanna's income
statement for January?
A. 12,320
If bad debts are estimated to be 2% of net credits sales, in
B. 14,940
the adjusting entry to recognize uncollectible accounts, the
C. 16,600
debit to expense will be for:
D. 20,880
A. 50,000
39. Silvanna uses the balance sheet approach in estimating
B. 50,600
uncollectible accounts expense, and aging the accounts
C. 51,000
receivable indicates the estimated uncollectible portion
D. 52,000
to be P16,600 The net realizable value of Silvanna's
45. At year-end Wanwan Company reported accounts
accounts receivable in the January 31 balance sheet is:
receivable of P6,000,000, allowance for doubtful
A. 529,120
accounts of P300,000 at the beginning of year.
B. 533,400
Probability
C. 537,680 Outstanding Accounts Receivable of Collection
D. 545,720 Under 15 days 3,000,000 96
40. Silvanna uses the income statement approach in 16-30 days 2,000,000 90
estimating uncollectible accounts expense, and 31-45 days 400,000 80
46-60 days 300,000 70
uncollectible accounts expense is estimated to be 2% of 61-75 days 200,000 65
credit sales. What is the amount of uncollectible Over 75 days 100,000 00
accounts expense recognized in Silvanna's income
statement for January? The accounts which have been outstanding over 75 days
A. 10,120 and have zero probability of collection would be written off
B. 11,000 immediately.
C. 14,400 a.) What is the appropriate balance of the allowance
D. 16,000 for doubtful accounts at year-end?
41. Silvanna's uses the income statement approach in A. 260,000
estimating uncollectible accounts expense, and B. 360,000
uncollectible accounts expense is estimated to be 2% of C. 560,000
credit sales. The net realizable value of Silvanna's D. 660,006
accounts receivable in the January 31 balance sheet is: b.) What amount should be reported as doubtful
A. 531,320 accounts expense for the current year?
B. 535,600 A. 100,000
C. 539,600 B. 260.000
D. 705,600 C. 360.000
42. Roger Company sold merchandise on credit with a list D. 460,000
price of P70,000. Terms were 2/10, n/30. Given the c.) What is the net realizable value of accounts
indicated sales discounts methods in the responses, receivable a year end?
which entry is correct? A. 5,340,000
A. Gross Price Method B. 5,440,000
Accounts Receivable………………. 63,000 C. 5,600,000
Sales ………………………….. 63,000
B. Not Price Method D. 5.900.000
Accounts Receivable……………… 68,600
Sales………………………….. 68,600 RECEIVABLE FINANCING (Pledge, Assignment,
C. Net Price Method Factoring and Discounting of note receivable
Accounts Receivable………………. 40,000
Sales…………………………… 40,000
D. Gross Price Method 46. On December 1, 2021, Hayabusa Company assigned
Accounts Receivable………………. 68,600 P800,000 of accounts receivable to Hilda Company as a
Sales…………………………... 68,600 security for a loan of P670,000. Hayabusa charged a 2%
 commission on the amount of the loan; the interest rate
on the note was 10%. During December, Hayabusa In addition, the factor charged 15% interest computed on
collected P220,000 on assigned accounts after a weighted average time to maturity of the accounts
deducting P760 of discounts. Hayabusa accepted receivable of 54 days.
returns worth P2,700 and wrote off assigned accounts
totaling P5,960. A. What is the amount of cash initially received from
the factoring?
a.) How much cash did Hayabusa received from Hilda A. 2,648,425
at the time of the transfer? B. 2.693.425
A. 603,000 C. 2,738,425
B. 654,000 D. 2,778,425
C. 656,600 B. If all accounts are collected, what is the cost of
D. 670,000 factoring the accounts receivable?
b.) What is the carrying value of the accounts A. 90,000
receivable - assigned as of December 31, 2021? B. 156,575
A. 0 C. 216,575
B. 570,580 D. 306,575
C. 579,240 C. If all accounts are not collected, what is the loss on
D. 580,000 factoring?
47. On November 1, 2021, Johnson Company assigned on a A. 50.000
non-notification basis accounts receivable of P8,000,000 B. 156,575
to a bank in consideration for a 24% interest bearing C. 206,575
loan. The loan value was 80% of the receivables D. 356,575
assigned and a 5% service fee on the accounts assigned 49. On December 1, 2021, Jawhead Corporation factored
was charged by the finance company. Johnson receivables with a face amount of P300,000 (with
Company collected assigned accounts of P3,000,000 existing provision for uncollectible in the amount of
and P2,000,000, net of P150,000 and P100,000 P6,000) to Joy Corporation. Joy Corporation advances
discounts on November 30 and December 31, P245,000 to Jawhead and retains 5% of the receivables.
respectively, and remitted the collections to the finance Jawhead Corporation incurred and paid P3,000
company on a monthly basis in partial payment for the transaction cost related to the factoring.
loan. The finance company applied first the collection to
the interest and the balance to the principal. a.) What amount of loss from the transfer should
Jawhead recognize assuming the factoring
a.) What amount of financial liability should Johnson agreement is considered as a sale?
Company report in its December 31, 2021 A. 0
statement of financial position? B. 34,000
A. 0 C. 37,000
B. 1,400,000 D. 44,000
C. 1,598,560 b.) What amount of loss from the transfer should
D. 1,656,000 Jawhead recognize assuming the factoring
b.) What amount of financial asset-loans and agreement is considered as borrowings?
receivable should Johnson Company continue to A. 0
recognized in its December 31, 2021 statement of B. 34,000
financial position assuming the company expects to C. 37,000
provide cash discounts on the outstanding D. 44,000
receivables and it is highly probable that the 50. Saber Company accepted from a customer P1,000,000
company will provide the discount and the face amount, 6 month, 8% note dated April 1, 2021. On
reasonable amount is P200,000? the same date, the entity discounted the note without
A. 0 recourse at a 10% discount rate. What amount of cash
B. 2,550,000 was received from the discounting?
C. 2,800,000 A. 900,000
D. 3,000,000 B. 972,000
48. Yin Company factored P3,000,000 of accounts C. 988,000
receivable to a finance entity at the beginning of current D. 990,000
year. Control was surrendered by Yin Company. 51. Using the same data in #50, what is the loss on note
receivable discounting?
The factor accepted the accounts receivable subject to A. 12.000
recourse for nonpayment. The fair value of the recourse B. 40,000
obligation is P50,000 C. 50,000
D. 52,000
The factor assessed a fee of 3% and retained a 52. On June 30, 2021, Thamuz Company discounted at the
holdback equal to 5% of the accounts receivable. bank a customer P6,000,000, 6-month, 10% note
 receivable dated April 30, 2021. The bank discounted B. 850,000
the note at 12% without recourse. What is the amount C. 997,500
received from the note receivable discounting? D. 1,250,000
A. 5,640,000 59. Using the same data in f#58, what amount of interest
B. 5,760,000 income should be reported for 2022?
C. 6,048,000 A. 50,500
D. 6,174,000 B. 59,800
53. Using the same data in #52, what is the loss on ποίε C. 79,800
receivable discounting? D. 252,500
A. 48,000 60. Using the same data in #58, what is the carrying amount
B. 52,000 of the note receivable on December 31, 2022?
C. 152,000 A. 747,500
D. 252,000 B. 827,300
NOTES RECEIVABLE C. 1,000,000
54. On January 1, 2021, Sun Company sold goods to Vale D. 1,077,300
Company. Vale signed a noninterest bearing note 61. Using the same data in #58, what amount on interest
requiring payment of P600,000 annually for seven years. income should be reported for 2023?
The first payment was made on January 1, 2021. The
prevailing rate of interest for this type of note at date of A. 66,184
issuance was 10%. B. 80,000
C. 86,184
PV of an ordinary annuity of 1 at 10% for 6 periods 4.36 D. 100,000
PV of an ordinary annuity of 1 at 10% for 7 periods 62. On December 31, 2021, Hanzo Company sold an
4.87 equipment with carrying amount of P1,000,000 and
received a noninterest-bearing note requiring payment of
What amount should be recorded as sales revenue in P250,000 annually for ten years. The first payment is
January 1, 20217 due December 31, 2022. The prevailing rate of interest
A. 2.142,000 for this type of note al date of issuance is 12%.
B. 2,616,000
C. 2,922,000 Present value of 1 at 12% for 10 periods 0.322
D. 3,216,000 Present value of an ordinary annuity of 1 at
55. Using the same data in #54, what is the carrying amount 12% for 10 periods 5.650
of the note receivable on January 1, 2021?
A. 2,322,000 What is the gain on sale of equipment to be recognized
B. 2,616,000 in 2021?
C. 3,000,000 A. 0
D. 3,600,000 B. 412,500
56. Using the same data in #54, what is the interest income C. 1,087,500
for 2021? D. 1,500,000
A. 232,200
B. 261,600 63. On January 1, 2021, Harith Company sold a building
C. 300,000 with a carrying amount of P2,500,000 and received as
D. 360,000 consideration P500,000 cash and a P2,000,000
57. Using the same data in #54, what is the carrying amount noninterest- bearing note due on January 1, 2024. There
of the note receivable on December 31, 2021? was no established exchange price for the building and
A. 2,277,600 the note had no ready market. The prevailing rate of
B. 2,877,600 interest for a note of this type on January 1, 2021 was
C. 3,000,000 10%. The present value of 1 at 10% for three periods is
D. 3,600,000 0.75. The present value of an ordinary annuity of 1 at
58. Hanabi Company is a dealer in equipment. On 10% for three periods is 2.47. What amount of interest
December 31, 2021, the entity sold an equipment in income should be reported for 2022?
exchange for at non-interest bearing note requiring five A. 150,000
annual payments of P250,000. The first payment was B. 165,000
made on December 31, 2022. The market interest rate C. 185,000
for similar notes was 8%. D. 200,000
64. Using the data in #63, what amount should be reported
PV of 1 at 8% for 5 periods 0.68 as gain or (loss) on sale of building for 2021?
PV of an ordinary annuity of 1 at 8% for 5 periods 3.99 A. (1,000,000)
B. (500,000)
On December 31, 2021, what is the carrying amount of C. 0
note receivable? D. 500,000
A. 747,500
65. Harley Co. has an 8% note receivable dated June 30, A. 2,380,000
2020. In the original amount of P300,000. Payment of B. 2,415,600
P100.000 in principal plus accrued interest are due C. 2,455,472
annually on July 1. 2021, 2022, 2023. In its June 30, D. 2,500,000
2022 statement of financial position, what amount should 68. Hylos Bank loaned P5,000,000 to a borrower on January
Harley report as current asset for interest on the note 1, 2019. The terms of the loan require principal
receivable? payments of P1,000,000 each year for 5 years plus
A. 0 interest at 10%.
B. 8,000
C. 16,000 The first principal and interest payment is due on
D. 24,000 January 1, 2020. The borrower made the required
66. On December 31, 2022, Hayabusa Company finished payments during 2020 and 2021.
consultation services and accepted in exchange a
promissory note with a face value of P400,000, a due However, during 2021 the borrower began to experience
date of December 31, 2024, and a stated rate of 5%, financial difficulties, requiring the bank to reassess the
with interest receivable at the end of each year. The fan collectability of the loan.
value of the services is not readily determinable and the
note is not readily marketable. Under the circumstances, On December 31, 2021, the bank has determined that
the note is considered to have an appropriated imputed the remaining principal payments will be collected but
rate of interest of 10%. The following interest factors are the collection of the interest is unlikely. The bank has
provided: accrued the interest for 2021.

Table Factors for three Periods Interest Rate The principal payments are expected to be P500,000 on
5% 10% January 1, 2022, P1,000,000 on January 1, 2023 and
Future value of 1 1.15763 1.33100
Present Value of 1 .86384 .75132
P1,500,000 on January 1, 2024. Round off present
Future value of ordinary annuity of 1 3.15250 3.31000 value. factors to two decimal places.
Present value of ordinary annuity of 1 2.72325 2.48685
1. What is the loan impairment loss for 2021?
What is the present value of the note? A. 590,000
A. 49,738 B. 645.000
B. 300,528 C. 890,000
C. 350,266 D. 1,000,000
D. 400,000 2. What is the interest income for 2022?
A. 215,500
LOANS RECEIVABLE B. 250,000
67. Irithel Bank granted a loan to borrower on January 1, C. 265,500
2022. The interest on the loan is 10% payable annually D. 300,000
starting December 31, 2022. The loan matures in three 3. What is the carrying amount of the loan receivable
years on December 31, 2024. on December 31, 20227
A. 1,561,000
Principal amount 2,500,000 B. 2.155.000
Direct origination cost incurred 50.000 C. 2.370.500
Indirect origination cost incurred 25,000 D. 2,500,000
Origination fee charged against the borrower 170,000 69. On December 1, 2022, Helcurt Company gave Hilda
Company a P4,000,000, 12% loan. Helcurt Company
After considering the origination fee charged against the paid proceeds of P3,880,000 after the deduction of a
borrower and the direct origination cost incurred, the P12,000 nonrefundable loan origination fee. Principal
effective rate on the loan is 12%. and interest are due in sixty monthly installments of
P289,000 beginning January 1, 2023.
1. What is the carrying amount of the loan receivable
on January 1, 20227 The repayments yield an effective interest rate of 12% at
A. 2,330,000 a present value of P4,000,000 and 13.4% at a present
B. 2.380.000 value of P3,880,000.
C. 2.405.000
D. 2,500,000 1. What amount of interest income should be reported in
2. What is the interest income for 2022? 2022?
A. 238,000 A. 38,800
B. 250,000 B. 40,000
C. 273,600 C. 43,326
D. 285,600 D. 44.666
3. What is the carrying amount of the loan receivable 2. What amount should be reported as accrued interest
on December 31, 2022? receivable on December 31, 2022?
A. 0
B. 40,000
C. 89,000
D. 120,000