Current Attempt in Progress Pharoah Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2023. The terms of acquisition for each truck were as follows: 1. Truck # 1 had a list price of $29.500 and was acquired for a cash payment of $22,400. 2. 3. 4. Truck # 2 had list price of $28,100 and was acquired for a down payment of $2,100 cash and a non-interest-bearing note with a face amount of $26,000. The note is due April 1, 2024. Pharoah would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. Truck # 3 had a list price of $24,000. It was acquired in exchange for a computer system that Pharoah carries in inventory. The computer system cost $16,400 and is normally sold by Pharoah for $19,600. Pharoah uses a perpetual inventory system. Truck #4 had a list price of $28,200. It was acquired in exchange for 1,000 common shares of Pharoah. The common shares trade in an active market valued at $23 per share in the most recent trade. Click here to view Table A4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Prepare the appropriate journal entries for Pharoah Inc. for the above transactions, assuming that Pharoah prepares financial statements in accordance with IFRS. For Truck # 2, calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is
Current Attempt in Progress Pharoah Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2023. The terms of acquisition for each truck were as follows: 1. Truck # 1 had a list price of $29.500 and was acquired for a cash payment of $22,400. 2. 3. 4. Truck # 2 had list price of $28,100 and was acquired for a down payment of $2,100 cash and a non-interest-bearing note with a face amount of $26,000. The note is due April 1, 2024. Pharoah would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. Truck # 3 had a list price of $24,000. It was acquired in exchange for a computer system that Pharoah carries in inventory. The computer system cost $16,400 and is normally sold by Pharoah for $19,600. Pharoah uses a perpetual inventory system. Truck #4 had a list price of $28,200. It was acquired in exchange for 1,000 common shares of Pharoah. The common shares trade in an active market valued at $23 per share in the most recent trade. Click here to view Table A4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Prepare the appropriate journal entries for Pharoah Inc. for the above transactions, assuming that Pharoah prepares financial statements in accordance with IFRS. For Truck # 2, calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Current Attempt in Progress
Pharoah Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks
on April 1, 2023. The terms of acquisition for each truck were as follows:
1.
Truck # 1 had a list price of $29.500 and was acquired for a cash payment of $22,400.
2.
3.
4.
Truck # 2 had list price of $28,100 and was acquired for a down payment of $2,100 cash and a non-interest-bearing note
with a face amount of $26,000. The note is due April 1, 2024. Pharoah would normally have to pay interest at a rate of 10%
for such a borrowing, and the dealership has an incremental borrowing rate of 8%.
Truck # 3 had a list price of $24,000. It was acquired in exchange for a computer system that Pharoah carries in inventory. The
computer system cost $16,400 and is normally sold by Pharoah for $19,600. Pharoah uses a perpetual inventory system.
Truck #4 had a list price of $28,200. It was acquired in exchange for 1,000 common shares of Pharoah. The common shares
trade in an active market valued at $23 per share in the most recent trade.
Click here to view Table A4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1
(a) Prepare the appropriate journal entries for Pharoah Inc. for the above transactions, assuming that Pharoah prepares financial
statements in accordance with IFRS. For Truck # 2, calculate the purchase price using any of the three methods (tables, financial
calculator, or Excel). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is
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