A manufacturer of shipping equipment decided to lease an equipment with a fair value of P2,500,000 on January 1,2020 to a company needing the equipment but lacks sufficient funds to pay the entire list price. The transactionwas recorded as a sale in the manufacturer's books and as a purchase by the buyer.The equipment had a carrying amount of P1,800,000 in the manufacturer's inventory at the time, and an estimateduseful life of 6 years.The following information is presented regarding the lease:Year-end annual lease paymentsP700,000Implicit rate10%Lease term5 yearsUSE PV FACTORS ROUNDED TO 4 DECIMALS.ROUND FINAL ANSWERS TO NEAREST PESO.Determine total income recognized by the manufacturer in 2020 related to the sale and lease. On January 1, 2020, A Company sold a building to B Company with a carrying amount of P4,200,000 forP5,500,000 and immediately leased it back. The building had a fair value of P4,700,000 at the date of sale, and hada remaining useful life of 10 years.Additional information on the lease is as follows:Lease term5 yearsP500,000Annuity made in advance10%Implicit rateUSE PV FACTORS ROUNDED TO 4 DECIMALS.ROUND FINAL ANSWERS TO NEAREST PESO.Determine total rent income recognized by B Company in 2020.

As per the honor code, We’ll answer the first question since the exact one wasn’t specified. Please…

Answered: A manufacturer of shipping equipment…

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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On January 1, 2025, Flounder Corporation sold a building that cost $274,530 and that had accumulated depreciation of $105,600 on the date of sale. Flounder received as consideration a $264,530 non-interest-bearing note due on January 1, 2028. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The amount of gain should be reported (b) Your answer is incorrect. $ Flounder must pay for the bonds 35335 On January 1, 2025, Flounder Corporation purchased 349 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2035, and pay interest annually beginning January 1, 2026. Flounder purchased the bonds to yield 11%. How much did Flounder pay for the bonds?…
Blossom Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2026 at à cost of $1,077,300. At December 31, 2025, the raw materials to be purchased have a market value of $1,027,500. In 2026, Blossom paid $1,077,300 to obtain the raw materials which were worth $1,027.500. Prepare the entry to record the purchase assuming the company uses a periodic inventory system. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts.)
Vd
On July 1, 2021, STS Inc. acquires a piece of equipment at $230,000 to manufacture product A. It paid $4,000 for shipping and $3,500 for installation of the equipment. Testing fees amounted to $4,500. The company was able to sell some of the output produced during the testing for $600. It also had to repair one part of the equipment that was damaged during the testing, which cost $1,000. The equipment’s useful life is 10 years or 400,000 units of product A. Its residual value is $35,000. It produced 800 units in 2021, 3,000 units in 2022 and 4,500 units in 2023. The units of production method is to be used for depreciation. Required Calculate the equipment total cost at acquisition. The equipment was sold on December 31, 2023 for $230,000 cash. Prepare the journal entry to record the sale.
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Blossom's Drillers erects and places into service an off-shore oil platform on January 1, 2025, at a cost of $8,160,000. Blossom estimates it will cost $1,007,000 to dismantle and remove the platform at the end of its useful life in 10 years, which the company is legally required to do. (The fair value at January 1, 2025, of the dismantle and removal costs is $430,000.) Prepare the entry to record the asset retirement obligation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
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On January 1, 2025, Sarasota Corporation sold a building that cost $273,840 and that had accumulated depreciation of $109,280 on the date of sale. Sarasota received as consideration a $263,840 non-interest-bearing note due on January 1, 2028. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The amount of gain should be reported $
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