Current Attempt in Progress Presented below are three independent situations. All the companies involved use ASPE, unless otherwise noted. 1. 2. 3. On December 31, 2023, Ivanhoe Inc. sold equipment to Oriole Corp. and immediately leased it back for 10 years. The equipment's selling price was $526,000, its carrying amount was $406,000, and its estimated remaining economic life was 12 years. On December 31, 2023, Pharoah Corp. sold a machine to Sheridan Ltd. and simultaneously leased it back for one year. The machine's selling price was $483,000, its carrying amount was $421,700, and it had an estimated remaining useful life of 14 years. The rental payments' PV for one year is $34,800. On January 1, 2023, Carla Corp. sold equipment with an estimated useful life of five years. At the same time, Carla leased back the equipment for two years under a lease classified as an operating lease. The equipment's selling price (fair value) was $213,200, the carrying amount was $306,700, the monthly rental under the lease was $6,500, and the rental payments' PV was $115,453. (a) For situation 1: Determine the amount of unearned profit to be reported by Ivanhoe from the equipment sale on December 31, 2023. Unearned profit $
Current Attempt in Progress Presented below are three independent situations. All the companies involved use ASPE, unless otherwise noted. 1. 2. 3. On December 31, 2023, Ivanhoe Inc. sold equipment to Oriole Corp. and immediately leased it back for 10 years. The equipment's selling price was $526,000, its carrying amount was $406,000, and its estimated remaining economic life was 12 years. On December 31, 2023, Pharoah Corp. sold a machine to Sheridan Ltd. and simultaneously leased it back for one year. The machine's selling price was $483,000, its carrying amount was $421,700, and it had an estimated remaining useful life of 14 years. The rental payments' PV for one year is $34,800. On January 1, 2023, Carla Corp. sold equipment with an estimated useful life of five years. At the same time, Carla leased back the equipment for two years under a lease classified as an operating lease. The equipment's selling price (fair value) was $213,200, the carrying amount was $306,700, the monthly rental under the lease was $6,500, and the rental payments' PV was $115,453. (a) For situation 1: Determine the amount of unearned profit to be reported by Ivanhoe from the equipment sale on December 31, 2023. Unearned profit $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Give me correct answer with explanation
Transcribed Image Text:Current Attempt in Progress
Presented below are three independent situations. All the companies involved use ASPE, unless otherwise noted.
1.
2.
3.
On December 31, 2023, Ivanhoe Inc. sold equipment to Oriole Corp. and immediately leased it back for 10 years. The
equipment's selling price was $526,000, its carrying amount was $406,000, and its estimated remaining economic life was 12
years.
On December 31, 2023, Pharoah Corp. sold a machine to Sheridan Ltd. and simultaneously leased it back for one year. The
machine's selling price was $483,000, its carrying amount was $421,700, and it had an estimated remaining useful life of 14
years. The rental payments' PV for one year is $34,800.
On January 1, 2023, Carla Corp. sold equipment with an estimated useful life of five years. At the same time, Carla leased
back the equipment for two years under a lease classified as an operating lease. The equipment's selling price (fair value) was
$213,200, the carrying amount was $306,700, the monthly rental under the lease was $6,500, and the rental payments' PV
was $115,453.
(a)
For situation 1: Determine the amount of unearned profit to be reported by Ivanhoe from the equipment sale on December 31,
2023.
Unearned profit
$
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