Problem 7-09 Grouper Corp. had the following long-term receivable account balances at December 31, 2019. Notes receivable Notes receivable - Employees $1,800,000 470,000 Transactions during 2020 and other information relating to Grouper' long-term receivables were as follows: 1. The $1,800,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Grouper's electronics division to Sheridan Company. Principal payments of $600,000 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 $470,000 note receivable is dated December 31, 2019, bears interest at 10%, and is due on December 31, 2022. The note is due from Marcia Cumby, president of Grouper Corp., and is secured by 10,000 Grouper common shares. Interest is payable annually on December 31, and the interest payment was made on December 31, 2020. The quoted market price of Grouper's common shares was $50 per share on December 31, 2020. 3. On April 1, 2020, Grouper sold a patent to Crane Company in exchange for a $200,000 non-interest-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 11%. The present value of $1 for two periods at 11% is 0.81162 (use this factor). The patent had a carrying amount of $45,000 at January 1, 2020, and the amortization for the year ended December 31, 2020 would have been $7,000. The collection of the note receivable from Crane is reasonably assured. 4. On July 1, 2020, Grouper sold a parcel of land to Skysong Inc. for $210,000 under an instalment sale contract. Skysong made a $64,000 cash down payment on July 1, 2020, and signed a four-year, 12% note for the $146,000 balance. The equal annual payments of principal and interest on the note will be $48,068, payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $230,000. Grouper had paid $160,000 for the land when it purchased it. Collection of the instalments on the note is reasonably assured. 5. On August 1, 2020, Grouper agreed to allow its customer, Saini Inc., to substitute a six-month note for accounts receivable of $230,000 it owed. The note bears interest at 6% and principal and interest are due on the note's 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.) Describe the relevant cash flows in terms of amount and timing. Cash inflows from notes 2021 2020 2022 2023 2024 1. 10% Note receivable Principal Interest 2.10% Note receivable Principal Interest 3. Non-interest-bearing note receivable Payment 4. Instalment contract receivable Down payment Payment 5.6% Note receivable Principal Interest Total Determine the amount of interest income that should be reported in 2020. (Round answers to 0 decimal places, e.g. 8,971.) Note Receivable Note Receivable-Employees Zero-interest-bearing Note-Patent Instalment Contract-Sale of Land Note Receivable - Saini Total Interest Income reported in 2020 s Determine the portion of the note and any interest that should be reported in current assets at December 31, 2020. (Round answers to o decimal places, e.g. 9,871. Do not leave any answer field blank. Enter o for amounts.) Current portion of 9% notes receivablet Current portion of 8% notes receivablet Non-interest-bearing note receivablet Current portion of instalment contract Note receivable from customer Total current notes and interest Determine the portion of the note that should be reported as a long-term investment at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Note receivable Note receivable-Employees Zero-interest-bearing Note-Patente Instalment Contract-Sale of Land Total long-term investment Prepare the long-term receivables section of Grouper statement of financial position at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Grouper Corp. Long-Term Receivables Section of Statement of Financial Positon December 31, 2020 10% note receivable from sale of division 10% note receivable from employees Zero-interest-bearing note from sale of patent Instalment contract receivable Total long-term receivables Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Grouper's statement of financial position at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Grouper Corp. Selected Statement of Financial Positon Balances December 31, 2020 Note receivable from customer Current portion of long-term receivables: Note receivable from sale of division Instalment contract receivable Total current portion of long-term receivables Accrued interest receivable: Note receivable from sale of division Instalment contract receivable Note receivable from customer Total accrued interest receivable Determine the total interest income from the long-term receivables that would appear on Grouper's income statement for the year ended December 31, 2020. (Round answer to o decimal places, e.g. 8,971.) Total interest income for year ended 12/31/20 s Problem 7-09 Grouper Corp. had the following long-term receivable account balances at December 31, 2019. Notes receivable Notes receivable - Employees $1,800,000 470,000 Transactions during 2020 and other information relating to Grouper' long-term receivables were as follows: 1. The $1,800,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Grouper's electronics division to Sheridan Company. Principal payments of $600,000 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 $470,000 note receivable is dated December 31, 2019, bears interest at 10%, and is due on December 31, 2022. The note is due from Marcia Cumby, president of Grouper Corp., and is secured by 10,000 Grouper common shares. Interest is payable annually on December 31, and the interest payment was made on December 31, 2020. The quoted market price of Grouper's common shares was $50 per share on December 31, 2020. 3. On April 1, 2020, Grouper sold a patent to Crane Company in exchange for a $200,000 non-interest-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 11%. The present value of $1 for two periods at 11% is 0.81162 (use this factor). The patent had a carrying amount of $45,000 at January 1, 2020, and the amortization for the year ended December 31, 2020 would have been $7,000. The collection of the note receivable from Crane is reasonably assured. 4. On July 1, 2020, Grouper sold a parcel of land to Skysong Inc. for $210,000 under an instalment sale contract. Skysong made a $64,000 cash down payment on July 1, 2020, and signed a four-year, 12% note for the $146,000 balance. The equal annual payments of principal and interest on the note will be $48,068, payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $230,000. Grouper had paid $160,000 for the land when it purchased it. Collection of the instalments on the note is reasonably assured. 5. On August 1, 2020, Grouper agreed to allow its customer, Saini Inc., to substitute a six-month note for accounts receivable of $230,000 it owed. The note bears interest at 6% and principal and interest are due on the note's 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.) Describe the relevant cash flows in terms of amount and timing. Cash inflows from notes 2021 2020 2022 2023 2024 1. 10% Note receivable Principal Interest 2.10% Note receivable Principal Interest 3. Non-interest-bearing note receivable Payment 4. Instalment contract receivable Down payment Payment 5.6% Note receivable Principal Interest Total Determine the amount of interest income that should be reported in 2020. (Round answers to 0 decimal places, e.g. 8,971.) Note Receivable Note Receivable-Employees Zero-interest-bearing Note-Patent Instalment Contract-Sale of Land Note Receivable - Saini Total Interest Income reported in 2020 s Determine the portion of the note and any interest that should be reported in current assets at December 31, 2020. (Round answers to o decimal places, e.g. 9,871. Do not leave any answer field blank. Enter o for amounts.) Current portion of 9% notes receivablet Current portion of 8% notes receivablet Non-interest-bearing note receivablet Current portion of instalment contract Note receivable from customer Total current notes and interest Determine the portion of the note that should be reported as a long-term investment at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Note receivable Note receivable-Employees Zero-interest-bearing Note-Patente Instalment Contract-Sale of Land Total long-term investment Prepare the long-term receivables section of Grouper statement of financial position at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Grouper Corp. Long-Term Receivables Section of Statement of Financial Positon December 31, 2020 10% note receivable from sale of division 10% note receivable from employees Zero-interest-bearing note from sale of patent Instalment contract receivable Total long-term receivables Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Grouper's statement of financial position at December 31, 2020. (Round answers to o decimal places, e.g. 8,971.) Grouper Corp. Selected Statement of Financial Positon Balances December 31, 2020 Note receivable from customer Current portion of long-term receivables: Note receivable from sale of division Instalment contract receivable Total current portion of long-term receivables Accrued interest receivable: Note receivable from sale of division Instalment contract receivable Note receivable from customer Total accrued interest receivable Determine the total interest income from the long-term receivables that would appear on Grouper's income statement for the year ended December 31, 2020. (Round answer to o decimal places, e.g. 8,971.) Total interest income for year ended 12/31/20 s