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Topic: Balance sheet presentation for N/R ? (

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wannabe
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Joined: 21 Jun 2008
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Posts: 522

Posted: 23 Mar 2009 at 17:48 \| IP Logged

I know that for A/R on the balance sheet, the gross amount of A/R is shown and then the allowance is showsn too. Then you have a Net A/R on B/S. However, for Note Receivable i'm not sure about presentation on B/S. I'm guessing that it's only the Net amount (gross minus any unamortized discount) and that the unamortized discount in not shown on the B/S, correct or not?

so I would have something like this:

A/R &nb sp;1000

allowance (500) 500

N/R &nb sp; &nb sp; 800

(this would be net net of any unamortized discount)

many thanks!

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divyagovil1
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Joined: 30 Jan 2009
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Posted: 23 Mar 2009 at 20:32 \| IP Logged

Per my understanding, you are correct, wannabe ! Notes receivable should be reported net of any unamortized discount.

Generally, its reported in current assets if it is to be realized within one year (operating cycle)....

The discount is earned over the life of the loan and represents the interest to be earned.

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Divya - CO State

Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011

wannabe
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Joined: 21 Jun 2008
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Posted: 24 Mar 2009 at 14:05 \| IP Logged

as always, thanks divyagovil!

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divyagovil1
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Joined: 30 Jan 2009
Location: India
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Posted: 24 Mar 2009 at 18:57 \| IP Logged

you know what, wannabe - this topic is one of my major weak areas !

I tend to get confused about calculating the PV of the N/R, unamortized discount, non-interest vs interest bearing N/R, stated vs effective rate :(

Have to practice a lot..... In case, you have any tips, please let me know ! Thanks..........

__________________
Divya - CO State

Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011

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