ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of $3,000,000, paid in cash, on 1 January 2018. The total price included installation fee of $50,000, which enabled the machine to be immediately available for ACY’s use on 1 January 2018. This is estimated that the machine has a useful life of 10 years with a residual value up to $200,000. Double-declining-balance depreciation method is adopted. On 1 January 2018, to help finance the acquisition of this machine, ACY issued a 5-year zero-interest-bearing note, with a face value of $1,000,000, due on 31 December 2022. The market rate is 8% for notes with similar risks. Question As at 31 October 2018, which of below correctly presents the zero-interest-bearing note on the Statement of Financial Position of ACY? Select one: A. Non-current liability: $725,955 B. Non-current liability: $1,000,000 C. Non-current liability: $680,583 D. Non-current liability: $58,076; AND Current-liability: $667,879
ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of $3,000,000, paid in cash, on 1 January 2018. The total price included installation fee of $50,000, which enabled the machine to be immediately available for ACY’s use on 1 January 2018. This is estimated that the machine has a useful life of 10 years with a residual value up to $200,000. Double-declining-balance
Question
As at 31 October 2018, which of below correctly presents the zero-interest-bearing note on the
Select one:
A.
Non-current liability: $725,955
B.
Non-current liability: $1,000,000
C.
Non-current liability: $680,583
D.
Non-current liability: $58,076; AND Current-liability: $667,879
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
