Kisses Company had the following property acquisitions of machineries during the current year: (a) During the early part of current year, the entity purchased a machine for P500,000 down and four monthly installments of P1,250,000. The cash price of the machine was P4,700.000. (b) At the beginning of current year, the entity purchased a machine for P2,000,000 in exchange for a non interest bearing note requiring four payments of P500,000. The first payment was made at the end of current year. The rate of interest for this note at date of issuance was 10%. The present value of ordinary annuity of 1 at 10% is 3.17 four four periods. The present value of annuity of 1 in advance at 10% is 3.49 for four periods. (c) At the beginning of current year, the entity acquired a machine by issuing a four-year, non interest bearing note for P2,000,000. The entity has a 10% interest for this type of note. The present value of 1 at 10% for 4 years is 0.68. (d) During the year, the entity exchanged an old machine, costing P3,000,000 and 50% depreciated, for a used machine and paid a cash difference of P500,000. The fair value of the old machine was determined to be P1,800,000. What is the total cost of machineries acquired? A . 9,445,000 B. 9,945,000 C. 9,645,000 D. 9,465,000
Kisses Company had the following property acquisitions of machineries during the current year:
(a) During the early part of current year, the entity purchased a machine for P500,000 down and four
monthly installments of P1,250,000. The cash price of the machine was P4,700.000.
(b) At the beginning of current year, the entity purchased a machine for P2,000,000 in exchange for a non
interest bearing note requiring four payments of P500,000. The first payment was made at the end of
current year. The rate of interest for this note at date of issuance was 10%. The present value of
ordinary annuity of 1 at 10% is 3.17 four four periods. The present value of annuity of 1 in advance at
10% is 3.49 for four periods.
(c) At the beginning of current year, the entity acquired a machine by issuing a four-year, non interest
bearing note for P2,000,000. The entity has a 10% interest for this type of note. The present value of 1
at 10% for 4 years is 0.68.
(d) During the year, the entity exchanged an old machine, costing P3,000,000 and 50%
used machine and paid a cash difference of P500,000. The fair value of the old machine was determined
to be P1,800,000.
What is the total cost of machineries acquired?
A
.
9,445,000 B. 9,945,000 C. 9,645,000 D. 9,465,000
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