ation inear:DuringuildingPl,160,000800,000000,000been1,220,0001,200,0001,180,000d. 1,160,000b.units.C.goodsto beargedGrey Company acquired a machine with a cash price ofabor.P2,000,000.400,0001,200,000800,000Down paymentn 000 shares of Grey Company at fair valuePrior to use, installation cost of P50,000 was incurred. Theachine has a residual value of P100,000.What is the initial measurement of the new machine?ring8. 2,000,000b. 2,400,000C. 2,050,000d. 2,450,000ryProblem 23-14 (IAA)ost.Çorner Company puchased a van with a list price ofP3,000,000. The dealer granted a 15% reduction in list pricendand an additional 10% cash discount on the net price ifpayment is made in 30 days.atIrrecoverable taxes amounted to P40,000 and the entity paidan extra P30,000 to have a special horn installed.adWhat amount should be recorded as initial cost of the van?2 2,550,0000. 2,335,500at2,365,000d. 2,325,000payment plan but a haveP120,000 was and monthlyinstallments of The cash price have beenProblem 23-12 (IAA)Note in 3 equal installments657The entity paid no the monthlyWhat be as of machine?machine has a of P100,000.

Cost of machine means the cost incurred to bring the machine in workable condition. It will include…

During Problem 23-12 (IAA) the year, Storm Company purchased a new machine. A P120.000 down payment was made and three monthly installments of P360,000. The cash price would have been payment plan but a P20,000 installation charge would have Pl,160,000 The entity paid no installation charges under the monthly been incurred with a cash purchase. What amount should be capitalized as cost of the machine? 1,220,000 1,200,000 b. 1,180,000 1,160,000

During Problem 23-12 (IAA) the year, Storm Company purchased a new machine. A P120.000 down payment was made and three monthly installments of P360,000. The cash price would have been payment plan but a P20,000 installation charge would have Pl,160,000 The entity paid no installation charges under the monthly been incurred with a cash purchase. What amount should be capitalized as cost of the machine? 1,220,000 1,200,000 b. 1,180,000 1,160,000

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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22, 23 pls
Caddis Company acquired a building with a loan that requires payments of $19,000 every six months for 3 years. The annual interest rate on the loan is 8%. What is the present value of the building? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice O O O O $99,600 $114,000 $38,988 $65,402 $48,965
P11-22. Zeff Company purchases a delivery van on January 1, 20X1, at a cost of $15,849. It has a useful life of four years and no estimated salvage value. When making the purchase decision, the company anticipated that the use of the van would generate a revenue (cash) inflow of $5,000 each year, assumed to occur at the end of the year. The discount rate that equates the purchase price to the expected cash inflows is 10%. Assume that depreciation is the company’s only expense for the year Required: 1. Using straight-line depreciation, do the following for each of the four years: a)Compute accumulated depreciation and the net book value of the van. b)Prepare Zeff’s income statement assuming that the $5,000 expected inflows occur. c)Compute the return on beginning net fixed assets. 2. Repeat requirements 1.a. through 1.c. using the discounted present value method of depreciation. 3. Which depreciation method provides the most useful information? 4. Why do you think that GAAP does not…
Problems 43 and 44 are based on the following statement: Used New machine machine Initial Cost 15,000 40,000 ($) Annual 8,000 2,000 operating cost ($/year) Salvage 5,000 10,000 value ($) Life (years) 3 6 Use an interest rate of 10% per year 43. The present worth of the new machine is closest to: (A) $43,630 (B) $43,066 (C) $45,210 (D) $49,660 44. To compare the machines on the basis of a present worth analysis, the present worth values to use are: (A) PWused $31,139, PW new = $43,066 (B) PWused $31,139, PW new = $37,461 (C) PWused $54,533, PW new = $43,066 (D) PWused $54,533, PW new = $37,461
The LJB Company must replace a freezer and is trying to decide betweenthe following two alternatives:Item Freezer A Freezer BInvestment required ($29,000) ($25,000)Annual electrical bill (3,000) (4,000)Salvage value 6,000 5,000Project life in years 11 11The LJB Company’s cost of capital is 8 percent.Which investment provides LJB with the lowest total cost?
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Borrowing cost (IAS-23) If the acquisition/construction of asset is financed through borrowings then any interest paid on such debt would be capitalized in the value of asset. Test your understanding.3 Acquisition Costs of Realty: Pollachek Co. purchased land as a factory site for $450,000. Process of tearing down two old buildings on the site and constructing the factory required 6 months, The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legal fees of $1,850 were paid for title investigation and drawing the purchase contract. Pollachek paid $2,200 to an engineering firm for a land survey, and $65,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor's charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at…
Sage Hill Company purchased a machine at a price of $104, 000 by signing a note payable, which requires a single payment of $138, 424 in 3 years. What would be the purchase price of the machine had Sage Hill negotiated a single payment of $120,000 in 3 years, using the same effective rate? To calculate, use (1) a financial calculator or (2) Excel function PV. ( Round answer to 2 decimal places, e.g. 5,275.25.)
Rusty Corporation purchased a rust-inhibiting machine by paying $58,500 cash on the purchase date and agreeing to pay $11,700 every three months during the next two years. The first payment is due three months after the purchase date. Rusty's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $58,500 payment was made, is closest to: (EV of $1. PV of $1. EVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. Multiple Choice $82,130 $140,630 $93,600. $152,100 0
Why? Revenue Recognition at a Point in Time versus Revenue Recognition Over Time. The Markert Com- 23 pany won a contract to build a shopping center at a price of $300 million. The following schedule details the estimated and actual costs of construction and the actual cash collections under the contract: Estimated (Actual) Costs of Construction Cash Collections from Customer 087 Year 1.. Year 2.. Year 3.. Year 4.. $ 40,000,000 60,000,000 70,000,000 30,000,000 $ 60,000,000 75,000,000 75,000,000 90,000,000 $200,000,000 $300,000,000 deb Required 1. Prepare an income statement for the Markert Company for each year assuming that the company recognizes revenue at a point in time. 2. Prepare an income statement for the Markert Company for each year assuming that the company recognizes revenue over time. 3. Which set of income statements best reflects the actual performance of the Markert Company? Why? bns bor