On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated depreciation of P5,500,000 in exchange for a P6,000,000 non-interest bearing note due in annual installments as follows: December 31, 2022 – P3,000,000 December 31, 2023 – P2,000,000 December 31, 2024 – P1,000,000 There was no exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2022 was 10%. (Round off present value factors to four decimal places.) Your answer
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- Cathymae Company acquired two items of machinery as follows:• On January 1, 2020, Cathymae Company purchased a machine for P2,000,000 in exchange for a noninterest bearing note requiring four payments of P500,000. The first payment was made on December 31, 2020, and the others are due annually on December 31. The prevailing rate of interest for this type of note at date of issuance was 12%. The present value of an ordinary annuity of 1 at 12% is 3.04 for four periods. The new machine was damaged during its installation and the repair cost amounted to P30,000.• On January 1, 2020, Cathymae Company acquired a used machine by issuing the seller a four-year, noninterest-bearing note for P2,000,000. The note is due on January 1, 2024. In recent borrowing, Cathymae Company has paid a 12% interest for this type of note. The present value of 1 at 12% for 4 years is 0.64.What is the total cost of the two machines?Cathymae Company acquired two items of machinery as follows: • On January 1, 2020, Cathymae Company purchased a machine for P2,000,000 in exchange for a noninterest bearing note requiring four payments of P500,000. The first payment was made on December 31, 2020, and the others are due annually on December 31. The prevailing rate of interest for this type of note at date of issuance was 12%. The present value of an ordinary annuity of 1 at 12% is 3.04 for four periods. The new machine was damaged during its installation and the repair cost amounted to P30,000. • On January 1, 2020, Cathymae Company acquired a used machine by issuing the seller a four-year, noninterest-bearing note for P2,000,000. The note is due on January 1, 2024. In recent borrowing, Cathymae Company has paid a 12% interest for this type of note. The present value of 1 at 12% for 4 years is 0.64. What is the total cost of the two machines?On January 1, 2020, Bake Company sold a piece of equipment costing P1,200,000 with accumulated depreciation of P400,000 to Cake Company. Bake received a downpayment of P100,000 and a 9% non-interest-bearing note, P1,000,000 due on December 31, 2025. Note: Round off present value factors up to four decimal points; round off the final value up to two decimal points. E.g., 0.7812 and 123,518.25 What is the gain/loss from selling the equipment?
- On January 1, 2020, Toot Company sold a piece of equipment costing P1,500,000 with accumulated depreciation of P200,000 to Sie Company. Toot received a downpayment of P200,000 and a 12% non-interest-bearing note, P2,000,000 due on December 31, 2027. Note: Round off present value factors up to four decimal points; round off the final value up to two decimal points. E.g., 0.7812 and 123,518.25 What is the balance of unamortized discount as of December 31, 2025?On January 1, 2022, Colorado Company sold a machinery with an acquisition cost of P 1,000,000 and accumulated depreciation as of this date of P 550,000. As a consideration, it received a 5-year , P 500,000, 12% note from Alabama Company. The note requires the interest to be paid annually every December 31 starting December 31, 2022 until the maturity on December 31, 2026. The prevailing interest rate for a note of this type is 10%. Round off present value factors to four decimal places. QUESTION: No. QUESTIONS Your Answer 1. At what amount shall the note be initially measured on January 1, 2022? 2. What amount should be reported as gain (loss) on sale of machinery? 3. What amount of interest income should be reported for the year 2023? 4. What is the carrying amount of the note receivable on December 31, 2023?DEF Company had acquired the following assets: Purchased Equipment on January 1, 2022 with a list price of P1,500,000 and was acquired with the following terms: Trade discount of 10%; Offered cash discount of 2% (which DEF did not take). o 0 -Purchased Machinery on January 1, 2022 under the following terms: Down payment of P150,000; 0 O Issued a non-interest bearing note payable in annual installments of P105,000 starting December 31, 2022. Total face value of the note was P420,000. The cash price equivalent for the machinery was not available. The incremental borrowing rate of DEF was 8%. PVF of P1 ordinary annuity for 4 periods was 3.31. A building was donated by a wealthy shareholder of DEF Company. At the time of donation, the fair value of the building was P15,000,000. DEF incurred necessary costs amounting to P150,000 in relation to the donated building. The cost of the building to the wealthy shareholder was P10,000,000. 0 REQUIREMENTS: What is the initial cost of the equipment?…
- On July 1, 2020, Manuel Corporation purchased machinery worth P 8,000,000. Terms: P 500,000 down payment, the balance on three equal annual payments every July 1 of each year. The cash price of the machinery is P 6,000,000. A promissory note is issued for the installment balance. Required: 1. What would be the journal entry to record the acquisition of machinery? 2. What would be the journal entries to record the amortization at December 31, 2020? 3. What is the carrying amount of machinery at December 31, 2020?On January 1, 2020, Bulbasaur Company sold a piece of equipment costing P1,100,000 with accumulated depreciation of P200,000 to Pikachu Company. Bulbasaur recelved a downpayment of P300,000 and a 10% non-interest-bearing note, P1,800,000 due on December 31, 2025. (Do not round off present value factors; only round off up to two decimals at the final value). Questions: 1. How much is the gain on the sale of equpment? 2. How much is the carrying amount of the notes receivable as of December 31, 2022? 3. How much is the balance of the discount on notes receivable as of December 31, 2023? 4. Assuming that all data are the same except that the transaction happened on November 1, 2020, but the number of years to maturity is still the same, how much is the carrying armount of the notes receivable as of December 31, 2022? 5. Related to no. 4, how much is the balance of the discount of the notes receivable as of December 31, 2023? 6. Related to no. 4, how much is the Interest income for the…On January 2, 2021, BB Corporation sold equipment with a cost of $700,000 and accumulated depreciation of $ 220,000 in exchange for a $600,000 non-interest-bearing note due on January 2, 2024. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type at January 2, 2021 was 10%. How much is the gain (loss) on the sale of equipment?
- On January 1, 2021, Abba Company sold a piece of equipment to Bacus Company with a cost of P3,500,000 and accumulated depreciation of P600,000 in exchange for an annual 10% interest-bearing note, P4,000,000. Bacus is required to make four equal annual payments of principal plus interest. What is the total proceeds for the year 2023?On December 31, 2021, Purple Company sold a building, receiving as a consideration a P4,000,000 non-interest bearing note due in three years. The building costs P3,800,000 and the accumulated depreciation was P1,600,000 at the date of sale. The prevailing rate of interest for a note of this type was 12%. How much gain or loss should Purple report on the sale of the asset? O 647.121 gain O 1,800,000 gain O 988.776 gain O 988.776 loss4. Prepare journal entry on January 1, 2027 to record the return of the machinery to the lessor. Assume thefair value of the asset is P300,000