If the asset was recorded at fair value, how much is the carrying value of the airport land rights as of December 31, 2021?
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The airport land rights were given to XYZ Airlines on June. 30, 2021. On that date, the rights were valued at P15,000,000. The agreement gives the entity 30 years over those rights. The entity incurred equipment rearrangement costs as result of these rights. As of Dec. 31, 2021, the fair value of the rights significantly declined to P7,000,000 but XYZ sees an acceptable level of profits in the upcoming years.
If the asset was recorded at fair value, how much is the carrying value of the airport land rights as of December 31, 2021?
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- On January 1, 2020, Tom Co (A seller-lessee) sells a building to MacCo (an unrelated buyerlessor) for cash of $2,000,000. The fair value of the building at that time is $1,800,000; the carrying amount immediately before the transaction is $1,000,000. At the same time, TomCo enters into a contract with MacCo for the right to use the building for 19 years, with annual payments of $120,000 payable at the end of each year. The interest rate implicit in the lease is 4.5%, which results in a present value of the annual payments of $1,459,200. The transfer of the asset to MacCo has been assessed as meeting the definition of a sale under PSAK 72. Discuss the implication of the transactions and state the journal entries on January 1, 2020On December 31, 2019, Hairy Inc. Sold computer equipment to Barber Co and immediately leased it back for 10 years. The sales price of the equipment was P560, 000, its carrying amount is P400, 000, and its estimated economic life is 12 years. Determine the amount of deferred revenue to be reported from the sale of the computer equipment on December 31, 2012.On September 1, 2019, NATSU DRAGNEEL Company paid P2, 000, 000 for the purchase price of the equipment acquired. NATSU DRAGNEEL also paid P20, 000 for nonrefundable sales taxes and P130, 000 for installation cost. The equipments estimated useful life is 10 years and residual value of P300, 000. On January 1, 2023, NATSU DRAGNEEL revised the total useful life of the asset to 15 years from acquisition date and residual value to P150, 000. Compute: Using the half-year convention & double-declining balance method what is the depreciation expense for 2021?
- Headland Mining Company purchased land on February 1, 2020, at a cost of $939,500. It estimated that a total of 51,600 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $92,700. It believes it will be able to sell the property afterwards for $103,000. It incurred developmental costs of $206,000 before it was able to do any mining. In 2020, resources removed totaled 25,800 tons. The company sold 18,920 tons. Compute the following information for 2020. (a) Per unit mineral cost (b) Total material cost of December 31, 2020, inventory $4 (c) Total material cost in cost of goods sold at December 31, 2020 24On July 1, 2021, Catlyn Company sold a parcel of undeveloped land to a construction company for $540,000. The book value of the land on Catlyn's books was $140,000. Terms of the sale required a down payment of 10% of the selling price and 9 annual payments of 10% of the selling price plus interest at an appropriate interest rate due on each July 1 beginning in 2022. Catlyn has no significant obligations to perform services after the sale. Calculate the balance in the deferred gross profit account in 2022 applying the installment sales method. (Please round answer to the nearest dollar, i.e. $86,666.67 should be interested as 86667).Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $945,100. It estimated that a total of 55,500 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $104,400. It believes it will be able to sell the property afterwards for $116,000. It incurred developmental costs of $232,000 before it was able to do any mining. In 2020, resources removed totaled 27,750 tons. The company sold 20,350 tons. Compute the following information for 2020. (a) Per unit mineral cost $enter a dollar amount (b) Total material cost of December 31, 2020, inventory $enter a dollar amount (c) Total material cost in cost of goods sold at December 31, 2020 $enter a dollar amount
- Safehouse Company was granted a patent on a product on January 1, 2011 with a 20-year useful life. To protect the patent, the entity purchased on January 1, 2021 for P4,500,000 a patent on a competing product which was originally issued on January 1, 2016. Because of the unique plant, the entity does not feel the competing patent can be used in producing a product. What amount should be recorded as amortization of the compéting patent for 2021? a. 450,000 b. 225,000 C. 300,000 d. 0.Presented below is selected information for Alatorre Company. 1. Alatorre purchased a patent from Vania Co. for $1,000,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? 2. Alatorre bought a franchise from Alexander Co. on January 1, 2019, for $400,000. The carrying amount of the franchise on Alexander's books on January 1, 2020, was $400,000. The franchise agreement had an estimated useful life of 30 years. Because Alatorre must enter a competitive bidding at the end of 2021, it is unlikely that the franchise will be retained beyond 2028. What amount should be amortized for the year ended December 31, 2020? 3. On January 1, 2020, Alatorre incurred…Sandhill Corporation purchased a patent for $147000 on September 1, 2024. It had a useful life of 10 years. On January 1, 2026, Sandhill spent $41000 to successfully defend the patent in a lawsuit. Sandhill feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense at the company's December 31, 2026 year-end if the straight-line method is used? O $25480. O $33680. O $31720. O $34660.
- On January 2021 Bob Company sells an item of machinery to Jaison Company for its fair value of $300,000. The asset had a carrying amount of $120,000 prior to the sale. The sale represents the satisfaction of a performance obligation, in accordance with IFRS 15 Revenue from Contracts with Customers. Bob Company enters on to a contracte with Jaison Company for the right to use the asset for the next five years. Annual payments of $50,000 are due at the end of each year. The interest rate implicit in the lease is 10%. The present value of the annual lease payments is $190,000. The remaining useful life of the machine is much greater than the lease term. Required: 1. Explain how it will be recorded in the books of Bob Company and show the necessary journal entries. 2. Why do companies prefer lease financing instead of direct purchase? Explain any three valid reasons.Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated that a total of 53,400 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $ 98,100. It believes it will be able to sell the property afterwards for $ 109,000. It incurred developmental costs of $ 218,000 before it was able to do any mining. In 2020, resources removed totaled 26,700 tons. The company sold 19,580 tons. Compute the following information for 2020. a) Per unit mineral cost $ (b) Total material cost of December 31, 2020, inventory $ (c) Total material cost in cost of goods sold at December 31, 2020 $Yokoyama Company owns a machine with a cost of $92,000 and accumulated depreciation of $18,500 that can be sold for $66,000 less a 5% sales commission. Alternatively, Yokoyama Company can lease the machine to another company for 3 years for a total of $74,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Yokoyama Company on the machine would total $10,500 over the 3 years. Prepare a differential analysis on February 21 as to whether Yokoyama Company should lease (Alternative 1) or sell (Alternative 2) the machine. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machine (Alt. 1) or Sell Machine (Alt. 2) February 21 Differential Effect Lease Sell Machine Machine (Alternative 2) (Alternative 1) (Alternative 2) Revenues Costs Profit (loss) Should Yokoyama Company lease (Alternative 1) or sell (Alternative 2) the machine?
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