CCC Company sold an equipment with a cost of P750,000 for an installment price of P1,000,000 on January 2, 2020. CCC received 20% down payment and the balance will be paid in eight equal quarterly installment starting March 31, 2020. The market rate of interest is 10%. The customer defaulted on the payment of fourth quarterly installment which resulted to repossession of the equipment. CCC anticipates selling price on reconditioned equipment of P400,000 after reconditioning it for P50,000. The gross profit for reconditioned equipment is expected to be 15% (Round off PV factor to 4 decimal places).How much is the Repossessed Item to be reported on December 31, 2020?how much is the Gain (Loss) on Repossession?how much is the Interest Revenue in 2020?
CCC Company sold an equipment with a cost of P750,000 for an installment price of P1,000,000 on January 2, 2020. CCC received 20% down payment and the balance will be paid in eight equal quarterly installment starting March 31, 2020. The market rate of interest is 10%. The customer defaulted on the payment of fourth quarterly installment which resulted to repossession of the equipment. CCC anticipates selling price on reconditioned equipment of P400,000 after reconditioning it for P50,000. The gross profit for reconditioned equipment is expected to be 15% (Round off PV factor to 4 decimal places).How much is the Repossessed Item to be reported on December 31, 2020?how much is the Gain (Loss) on Repossession?how much is the Interest Revenue in 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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CCC Company sold an equipment with a cost of P750,000 for an installment price of P1,000,000 on January 2, 2020. CCC received 20% down payment and the balance will be paid in eight equal quarterly installment starting March 31, 2020. The market rate of interest is 10%. The customer defaulted on the payment of fourth quarterly installment which resulted to repossession of the equipment. CCC anticipates selling price on reconditioned equipment of P400,000 after reconditioning it for P50,000. The gross profit for reconditioned equipment is expected to be 15% (Round off PV factor to 4 decimal places).How much is the Repossessed Item to be reported on December 31, 2020?how much is the Gain (Loss) on Repossession?how much is the Interest Revenue in 2020?
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