leased are payable at the end of each year, beginning December 31 cost was P800,000. The implicit rate in the lease is 12% which of the current year. The lease term is 6 years and the useful At the beginning of current year, Ultra Company leased The fair value of the equipment was P1,273,800 while the The lessee had the option to purchase the equipment for P80,000 at the end of the lease term. It is reasonably certain present value of an ordinary annuity of 1 at 12% for 6 periods The present value of 1 at 12% for 6 periods is 0.51 and the equipment to another entity under a sales type lease. Rentala Problem 14-19 (IAA) life of the equipment is 8 years. is known to the lessee. that the lessee shall exercise the purchase option. The present value of 1 at 12% for 6 periods is 0.51 and a is 4.11. 1. What amount should be recognized as annual rental payment? a. 194,647 b. 184,720 c. 300,000 d. 309,927 2. What amount should be reported initially as total financial revenue? a. 606,200 b. 526,200 c. 388,320 d. 920,000 3. What amount should be reported as gross income from the sale? a. 606,200 b. 473,800 c. 553,800 d. 0.
leased are payable at the end of each year, beginning December 31 cost was P800,000. The implicit rate in the lease is 12% which of the current year. The lease term is 6 years and the useful At the beginning of current year, Ultra Company leased The fair value of the equipment was P1,273,800 while the The lessee had the option to purchase the equipment for P80,000 at the end of the lease term. It is reasonably certain present value of an ordinary annuity of 1 at 12% for 6 periods The present value of 1 at 12% for 6 periods is 0.51 and the equipment to another entity under a sales type lease. Rentala Problem 14-19 (IAA) life of the equipment is 8 years. is known to the lessee. that the lessee shall exercise the purchase option. The present value of 1 at 12% for 6 periods is 0.51 and a is 4.11. 1. What amount should be recognized as annual rental payment? a. 194,647 b. 184,720 c. 300,000 d. 309,927 2. What amount should be reported initially as total financial revenue? a. 606,200 b. 526,200 c. 388,320 d. 920,000 3. What amount should be reported as gross income from the sale? a. 606,200 b. 473,800 c. 553,800 d. 0.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:are payable at the end of each year, beginning December 31
equipment to another entity under a sales type lease. Rentala
At the beginning of current year, Ultra Company leased
The fair value of the equipment was P1,273,800 while the
of the current year. The lease term is 6 years and the useful
cost was P800,000. The implicit rate in the lease is 12% which
The lessee had the option to purchase the equipment for
The present value of 1 at 12% for 6 periods is 0.51 and the
P80,000 at the end of the lease term. It is reasonably certain
present value of an ordinary annuity of 1 at 12% for 6 periods
Problem 14-19 (IAA)
life of the equipment is 8 years.
The fair value of the equipment was
is known to the lessee.
that the lessee shall exercise the purchase option.
The present value of 1 at 12% for 6 periods is 0.51 and a
present value of an ordinary annuity of 1 at 12% for 6 period.
is 4.11.
1. What amount should be recognized as annual rental
payment?
a. 194,647
b. 184,720
c. 300,000
d. 309,927
2. What amount should be reported initially as total financial
revenue?
a. 606,200
b. 526,200
c. 388,320
d. 920,000
3. What amount should be reported as gross income from
the sale?
a. 606,200
b. 473,800
с. 553,800
d.
0.
4. What amount should be reported as interest income 101
the current year?
а. 152,856
b. 216,000
с. 147,960
d. 101,033
470
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