The terms of the arrangement require the operator to: a. Construct a road-completing construction within two years b. Maintain and operate the road for three years c. Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of year 4. d. The government grants the operator the right to collect toll fees from road users and in addition, guarantees a minimum amount of P100 and interest at a specified rate of 24.42% to reflect the timing of cash receipts. e. The contract ends in year 5. The operator makes the following estimates: Year Contract Cost Stand-alone selling price

The terms of the arrangement require the operator to: a. Construct a road-completing construction within two years b. Maintain and operate the road for three years c. Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of year 4. d. The government grants the operator the right to collect toll fees from road users and in addition, guarantees a minimum amount of P100 and interest at a specified rate of 24.42% to reflect the timing of cash receipts. e. The contract ends in year 5. The operator makes the following estimates: Year Contract Cost Stand-alone selling price

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

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The terms of the arrangement require the operator to: a. Construct a road-completing construction within two years b. Maintain and operate the road for three years c. Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of year 4. d. The government grants the operator the right to collect toll fees from road users. e. The contract ends in year 5. е. The operator makes the following estimates: Year Stand-alone selling price Contract Cost Construction Services 1 70 Forecast cost +10% 2 80 Forecast cost +20% Operation Services 3-5 25 Forecast cost +30% Road resurfacing 4 15 Forecast cost +10% Compute the carrying amount of intangible asset at the end of year 2.
The terms of the arrangement require the operator to: Construct a road-completing construction within 2 years Maintain and operate the road for 3 years Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of Year 4. The government grants the operator the right to collect toll fees from road users. The contract ends in Year 5. The operator makes the following estimates: Construction cost Stand-alone selling price Forecast cost +10% Forecast cost +20% Forecast cost +30% Forecast cost +10% Construction Services Year 1 70 80 |Operation Services Road Resurfacing 3-5 4 25 15 Compute the carrying amount of intangible asset at the end of Year 2.
The terms of the arrangement require the operator to: a. Construct a road-completing construction within two years b. Maintain and operate the road for three years c. Resurface the road at the end of Year 4 d. The government pays the operator P200 per year in Years 3 to 5 for making the road available to the public e. The road is turn-over to the government at the end of Year 5 f. The operators determine that the implied interest rate is 24.42%. g. The operator finances the arrangement entirely with debt. The debt proceeds are taken as the contract cost are paid. The debt is payable as follows: 75 in each of years 3 and 4 and P40 in year 5. The effective interest rate is 25.77% The operator makes the following estimates: Year Contract Cost Stand-alone selling price Construction Services 1 70 Forecast cost +10% 2 80 Forecast cost +20% Operation Services Road resurfacing 3-5 25 Forecast cost +30% 4 15 Forecast cost +10% Compute for the profit for year 2.
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The terms of the arrangement require the operator to: Construct a road-completing construction within 2 years Maintain and operate the road for 3 years Resurface the road at the end of Year 4 The government pays the operator P200 per year in Years 3 to 5 for making the road available to the public The road is turnover to the government at the end of Year 5 The operators determine that the implied interest rate is 24.42% The operator finances the arrangement entirely with debt. The debt proceeds are taken as the contract cost are paid. The debt is payable as follows: P75 in each Years of 3 and 4 and P40 in Year 5. The effective interest rate is 25.77% The operator makes the following estimates: YEAR CONSTRUCTION COST STAND-ALONE SELLING PRICE Forecast cost +10% Construction Services 1 70 80 Forecast cost +20% Operation Services Road Resurfacing Compute for the profit for Year 2. 3-5 4 25 Forecast cost +30% 15 Forecast cost +10% (With two decimal places for the final answer)
The terms of the arrangement require the operator to: Construct a road-completing construction within two years Maintain and operate the road for three years Resurface the road at the end of Year 4 The government pays the operator P200 per year in Years 3 to 5 for making the road available to the public The road is turn-over to the government at the end of Year 5 The operators determine that the implied interest rate is 24.42%. The operator finances the arrangement entirely with debt. The debt proceeds are taken as the contract cost are paid. The debt is payable as follows: 75 in each of years 3 and 4 and P40 in year 5. The effective interest rate is 25.77% The operator makes the following estimates: Year Contract Cost Stand-alone selling price Construction Service 1 70 Forecast cost + 10% 2 80 Forecast cost + 20% Operation Services 3-5 25 Forecast cost + 30% Road resurfacing 4 15 Forecast cost + 10% Compute for the profit for…
The terms of the arrangement require the operator to: Construct a road-completing construction within two years Maintain and operate the road for three years Resurface the road at the end of Year 4 The government pays the operator P200 per year in Years 3 to 5 for making the road available to the public The road is turn-over to the government at the end of Year 5 The operators determine that the implied interest rate is 24.42%. The operator finances the arrangement entirely with debt. The debt proceeds are taken as the contract cost are paid. The debt is payable as follows: 75 in each of years 3 and 4 and P40 in year 5. The effective interest rate is 25.77% The operator makes the following estimates: Year Contract Cost Stand-alone selling price Construction Services 1 70 Forecast cost +10% 2 80 Forecast cost +20% Operation Services Road resurfacing 3-5 25 Forecast cost +30% 4 15 Forecast cost +10% Compute for the profit for year 2.
The terms of the arrangement require the operator to: Construct a road-completing construction within two years Maintain and operate the road for three years Resurface the road at the end of Year 4 The government pays the operator P200 per year in Years 3 to 5 for making the road available to the public The road is turn-over to the government at the end of Year 5 The operators determine that the implied interest rate is 24.42%. The operator finances the arrangement entirely with debt. The debt proceeds are taken as the contract cost are paid. The debt is payable as follows: 75 in each of years 3 and 4 and P40 in year 5. The effective interest rate is 25.77% The operator makes the following estimates: Stand-alone selling price Forecast cost +10% Forecast cost +20% Forecast cost +30% Forecast cost +10% Year Contract Cost Construction Services 70 2 80 Operation Services Road resurfacing 25 15 35 4. Compute for the carrying amount of intangible asset at the end of year 2.