Problem 10: Use the following information for the next three questions:On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 andaccumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 anda noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment wasmade on January 1, 2021. The prevailing rate of interest for this type of note is 12%.29. How much is the carying amount of the note on initial recognition?30. How much is the interest income for 2021?31. How much is the carrying amount of the note on January 1, 2022?Problem 11: Use the following information for the next three questions:On January 1, 2021, FORCEFUL Co. sold machinery with historical cost of P8,000,000 and accumulateddepreciation of P4,400,000 in exchange for a 3-year, P4,800,000 noninterest-bearing note receivable due in equalsemi-annual payments starting July 1, 2021. The prevailing rate of interest of this type of note is 10%.32. How much is the carrying amount of the note on initial recognition?33. How much is the interest income for 202134. How much is the carrying amount of the note on December 31, 2021?

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Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carying amount of the note on January 1, 2022?

Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carying amount of the note on January 1, 2022?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information for the next two questions:On January 1, 20x1, ABC Co. sold machinery with historical cost of ₱3,000,000 and accumulated depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of interest for this type of note is 10%.11. How much is the interest income in 20x1?a. 88,825b. 177,649c. 128,964d. 164,591 12. How much is the carrying amount of the receivable on December 31, 20x1?a. 1,241,083b. 982,378c. 1,690,051d. 1,594,388 with solution please
Use the following information for the next two questions:On January 1, 20x1, ABC Co. sold machinery with historical cost of ₱3,000,000 and accumulated depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of interest for this type of note is 10%.11. How much is the interest income in 20x1?a. 88,825b. 177,649c. 128,964d. 164,59112. How much is the carrying amount of the receivable on December 31, 20x1?a. 1,241,083b. 982,378c. 1,690,051d. 1,594,38813. On January 1, 20x1, ABC Co. sold machinery costing ₱3,000,000 with accumulated depreciation of ₱1,100,000 in exchange for a 3-year, ₱900,000 noninterest-bearing note receivable due as follows:Date Amount of installmentDecember 31, 20x1 400,000December 31, 20x2 300,000December 31, 20x3 200,000Total 900,000The prevailing rate of interest for this type of note is 10%. How much is the carrying…
On January 1,2021, Gale Co. sold delivery equipment costing ₱1,000,000 with accumulated depreciation of ₱150,000 in exchange for a 3-year, ₱1,800,000 noninterest-bearing note receivable due as follows: Expected date of collection Amount of cash flow 31-Dec-2021 ₱1,000,000 31-Dec-2022 600,000 31-Dec-2023 200,000 ₱1,800,000 The prevailing rate of interest for this type of note is 12%. Based on the above data, answer the following: 1. How much is current portion of the note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635 2. How much is the noncurrent portion of note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635
On January 1,2021, Gale Co. sold delivery equipment costing ₱1,000,000 with accumulated depreciation of ₱150,000 in exchange for a 3-year, ₱1,800,000 noninterest-bearing note receivable due as follows: Expected date of collection Amount of cash flow 31-Dec-2021 ₱1,000,000 31-Dec-2022 600,000 31-Dec-2023 200,000 ₱1,800,000 The prevailing rate of interest for this type of note is 12%. Based on the above data, answer the following: 1. How much is the gain or loss on sale of delivery equipment in 2021? a. Nil c. ₱513,580 b. ₱663,580 d. ₱1,513,580 2. How much is the interest income of 2021? a. Nil c. ₱83,425 b. ₱181,630 d. ₱188,728 3. How much is the carrying amount of the note on December 31,2021? a. ₱695,210 c. ₱178,635 b. ₱876,008 d. ₱512,399 4. How much is current portion of the note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635 5. How much is the noncurrent portion of note on December 31,2021? a. ₱600,000 c. ₱83,425 b. ₱516,575 d. ₱178,635
On January 1, 2023, ABC Company sold a office equipment with a cost of P5,400,000 and accumulated depreciation of P2,980,000. In consideration for the sale, ABC Company received cash of P220,000 and a noninterest-bearing note receivable of P3,500,000 due on December 31, 2026. The prevailing rate of interest for this type of note is 12%. On January 1, 2023, ABC Company sold an old machinery with a cost of P3,000,000 and accumulated depreciation of P2,000,000. In consideration for the sale, ABC Company received cash of P250,000 and a noninterest-bearing note receivable of P1,850,000 due in 5 equal annual installments starting December 31, 2023. The prevailing rate of interest of this type of note is 10%. 1. The total gain or loss on sale of office equipment and old machinery is A. Nil B. 600,000 C. 652,591 D. 676,904 2. The interest income to be recognized in 2023 is A. Nil B. 266,918 C. 407,177 D. 605,000 3. The carrying amount of the note as of December 31, 2023 is A. 3,256,904 B.…
On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated depreciation of P1,800,000. In consideration for the sale, Sana Madali Lang Company received cash of P100,000 and a P3,000,000 non-interest-bearing note due on December 31, 2021. The prevailing interest rate for a note of this type is 10%. (The PVF of 1 at 10% for 4 years is 0.6830 while the PVF of ordinary annuity at 10% for 4 years is 3.1699) How much is the carrying amount of the note on initial recognition? а. Р3.000,000 b. P5,000,000 c. P2,049,000 1. d. P2,117,300 е. Р9,509,700 How much is the loss on sale of machinery? a. P1,051,000 b. P1,082,700 c. P1,151,000 2. d. P982,700 e. P2,851,000 3. How much is the interest income for 2019? а. Р225,390 b. P204,900 c. P211,730 d. P232,903 е. Р300,000 4. How much is the carrying amount of the note on December 31, 2019? а. Р2,329,030 b. P2,401,831 c. P2,561,933 d. P2,253,900 e. P2,479,290
On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated depreciation of P1,800,000. In consideration for the sale, Sana Madali Lang Company received cash of P100,000 and a P3,000,000 non-interest-bearing note due on December 31, 2021. The prevailing interest rate for a note of this type is 10%. (The PVF of 1 at 10% for 4 years is 0.6830 while the PVF of ordinary annuity at 10% for 4 years is 3.1699) 4. How much is the carrying amount of the note on December 31, 2019? a. P2,329,030 b. P2,401,831 c. P2,561,933 d. P2,253,900 e. P2,479,290
On January 1, 2021, Beauty Company sold a machine with a cost of P500,000 and accumulated depreciation of P350,000 to Gee Company. In lieu of cash payment, Gee Company gave Beauty Company a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31. The 10% interest rate is a realistic rate of interest for a note of this type. Required: Compute the following as of December 31, 2021: (Round off PV factors to 4 decimal places before multiplying.) 4. Current portion of notes receivable Answer 5. Noncurrent portion of notes receivable
On January 1, 2021, Beauty Company sold a machine with a cost of P500,000 and accumulated depreciation of P350,000 to Gee Company. In lieu of cash payment, Gee Company gave Beauty Company a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31. The 10% interest rate is a realistic rate of interest for a note of this type. Required: Compute the following as of December 31, 2021: (Round off PV factors to 4 decimal places before multiplying.) 1. Effective interest rate 2. Gain or loss on sale of machinery (place parenthesis if loss) 3. Interest income
The records for Bosch Co. show this data for 2019: ● Gross profit on installment sales recorded on the books was $340,000. Actual collections of installment receivables (how it is recorded for tax) was $200,000 in 2019 , $40,000 in 2020 and $100,000 in 2021. ● Machinery was acquired in January for $220,000. Straight-line depreciation over a five-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Bosch may deduct 14% for 2019 37% for 2020, 28% for 2021, 15% for 2022 and 6% for 2023 . ● The estimated warranty liability related to 2019 sales expensed for book was $20,800. Actual repair costs under warranties deductible for tax during 2019 were $12,800. The remainder will be paid in 2020. ● Each year the company receives $5,000 in municipal bond dividend income. (not taxable). ● Pretax financial income is $514,800 for 2019. The tax rate is 30%. Pretax financial income is $483,000 for 2020. Assume there were no…
14. The records for ABC Co. show this data for 2020: • Gross profit on installment sales recorded on the books was P300,000. Gross profit from collections of installment receivables was P220,000. • Life insurance on officers was P3,800. (ABC Company is the beneficiary.) • Machinery was acquired in January for P300,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, accelerated depreciation is used and ABC may deduct 14% for 2020. • Interest received on tax exempt Iowa State bonds was P9,000. • The estimated warranty liability related to 2020 sales was P19,600. Repair costs under warranties during 2020 were P13,600. The remainder will be incurred in 2021. For tax purposes. Expenses related to warranty is to be deducted when repair costs are actually rendered. • Pretax financial income is P450,000. The tax rate is 30%. The total income tax expense for the year 2020 would be?
On January 1, 2022, AA Company sold an equipment costing P5,000,000 and accumulated depreciation of P1,500,000. AA received a P1,000,000 cash and a 10%, 5-year, P7,000,000 note receivable every December 31 in equal annual installment of P1,000,000 plus interest starting December 31, 2022. Interest effective on this note when received is at 8%. How much is the interest income in AA’s statement of comprehensive income for the period ending December 31, 2022?