Problem 10

Problem 10 Ryan Company had the following account balances on January 1, 2019: Notes receivable from sale of an idle building 7,500,000 Note receivable from an officer 2,000,000 Transactions during 2019 and other information relating to Ryan's receivables follow: The P7,500,000 note receivable is dated May 1, 2018, bears interest at 9%, and represents the balance of the consideration Ryan Company received from the sale of its idle building to Able Company. > Principal payments of P2,500,000 plus interest are due annually beginning May 1, 2019. Able Company made its first principal and interest payment on May 1, 2019. Collection of the remaining note instalments is reasonably assured. > The P2,000,000 note receivable is dated December 31, 2016, bears interest at 8%, and is due on December 31, 2021. The note I due from the president of Ryan Company, and is collateralized by 50,000 ordinary shares of Ryan Company. > Interest is payable annually on December 31, and all interest payments were made through December 31, 2019. The quoted market price of ordinary share was P45 on December 31, 2019. On July 1, 2019, Ryan Company sold a parcel of land to Barr Company for P4,000,000 under an instalment sale contract. Barr Company made a P1,200,000 cash down payment on July 1, 2019, and signed a 4-year 10% note for the P2,800,000 balance. The equal annual payments of principal and interest on the note totaled P883,320, payable on July 1 of each year from 2020 through 2023. > The fair value of the land at the date of sale was P4,000,000. The cost of the land was P3,000,000. Collection of the note instalments is reasonably assured. Required: 1. Determine the amount of notes receivable including accrued interest that should be classified as current assets on December 31, 2019. 2. Determine the amount of notes receivable that should be classified as noncurrent assets on December 31, 2019