Flounder Corp. had the following long-term receivable account balances at December 31, 2019.

Notes receivable		$ 1,650,000
Notes receivable - Employees		400,000

Transactions during 2020 and other information relating to Flounder' long-term receivables were as follows:

1.		The $ 1,650,000 note receivable is dated May 1, 2019, bears interest at 9%, and represents the balance of the consideration received from the sale of Flounder's electronics division to Pharoah Company. Principal payments of $ 550,000 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 instalments is reasonably assured.
2.		The $ 400,000 note receivable is dated December 31, 2019, bears interest at 8%, and is due on December 31, 2022. The note is due from Marcia Cumby, president of Flounder Corp., and is secured by 10,000 Flounder common shares. Interest is payable annually on December 31, and the interest payment was made on December 31, 2020. The quoted market price of Flounder's common shares was $ 50 per share on December 31, 2020.
3.		On April 1, 2020, Flounder sold a patent to Cullumber Company in exchange for a $ 200,000 noninterest-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 12%. The present value of $ 1 for two periods at 12% is 0.79719 (use this factor). The patent had a carrying amount of $ 37,000 at January 1, 2020, and the amortization for the year ended December 31, 2020 would have been $ 8,000. The collection of the note receivable from Cullumber is reasonably assured.
4.		On July 1, 2020, Flounder sold a parcel of land to Shamrock Inc. for $ 240,000 under an instalment sale contract. Shamrock made a $ 63,000 cash down payment on July 1, 2020, and signed a four-year, 11% note for the $ 177,000 balance. The equal annual payments of principal and interest on the note will be $ 57,052, payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $ 240,000. Flounder had paid $ 150,000 for the land when it purchased it. Collection of the instalments on the note is reasonably assured.
5.		On August 1, 2020, Flounder agreed to allow its customer, Saini Inc., to substitute a six-month note for accounts receivable of $ 240,000 it owed. The note bears interest at 6% and principal and interest are due on the notes maturity date.

Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. The tables in this problem are to be used as a reference for this problem. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Part 4: Calculate Notes and interest reported as current assets:

Part 5: Calculate Notes and interest reported as long-term investments:

f Ch 7: Homework Question 1 of 2 217 TII Part 1 Your answer is correct. Describe the relevant cash flows in terms of amount and timing. Cash inflows from notes 2020 2021 1. 9% Note receivable Principal $ 550,000 $ 550,000 $ Interest 148,500 99,000 2. 8% Note receivable Principal + Ch 7: Homework Question 1 of 2 > 217 III Interest 148,500 99,000 2. 8% Note receivable Principal i i Interest 32,000 32,000 3. Non-interest-bearing note receivable Payment i i 4. Instalment contract receivable Down payment 63,000 i Payment i 57,052 5. 6% Note receivable Principal 240,000 f Ch 7: Homework Question 1 of 2 217 III 3. Non-interest-bearing note receivable Payment i i 4. Instalment contract receivable Down payment 63,000 i Payment i 57,052 5. 6% Note receivable Principal i 240,000 Interest i 7,200 Total $ 793,500 $ 985,252 $ e Textbook and Media Part 2 Your answer is correct. Determine the amount of interest income that should be reported in 2020. (Round answers to 0 decimal places, e.g. 8,971.) Note Receivable S 115,500 Note Receivable-Employees $ 32,000 Zero-interest-bearing Note-Patent $ 14,349 Instalment Contract-Sale of Land S 9,735 Note Receivable - Saini $ 6,000 Total Interest Income reported in 2020 S 177,584 e Texthook and Media Question 1 of 2