Tourmalet sold an item of plant for $50 million on 1 April 20X4. The plant had a carrying amount of $40 million at the date of sale, which was charged to cost of sales. On the same date, Tourmalet entered into an agreement to lease back the plant for the next five years (being the estimated remaining life of the plant) at a cost of $14 million per annum payable annually in arrears. An arrangement of this type is normally deemed to have a financing cost of 10% per annum. What amount will be shown as income from this transaction in the statement of profit or loss for the year ended 30 September 20X4?

Pharoah Corporation manufactures specialty equipment with an estimated economic life of 12 years and leases it to Provincial Airlines Corp. for a period of 10 years. Both Pharoah and Provincial Airlines follow ASPE. The equipment's normal selling price is $210,482 and its unguaranteed residual value at the end of the lease term is estimated to be $13,000. Provincial Airlines will make annual payments of $22,600 at the beginning of each year and pay for all maintenance and insurance. Pharoah incurred costs of $105,000 in manufacturing the equipment and $7,000 in negotiating and closing the lease. Pharoah has determined that the collectibility of the lease payments is reasonably predictable, that no additional costs will be incurred, and that the implicit interest rate is 8%. Provincial Airlines Corp. has an incremental borrowing rate of 8%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. (b) What classification…

Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,00O. Prior to the machine's use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 68,000 pounds. The subsidiary immediately borrowed 160,000 pounds on a five-year note with 8 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 228,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2020, the subsidiary rented the building for three years to a group of local attorneys for 8,200 pounds per month. By year-end, rent payments totaling 82,000 pounds had been received, and 16,400 pounds was in accounts receivable. On October 1, 2020, 2,800 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,900 pounds back to Sullivan's Island Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound…