NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of NOREEN on January 1,2019? A. 1,500,000 B. 1,815,000 C. 3,000,000 D. 3,630,000 Using the information above, what is the interest expense for 2019? 2. A. None B. 300,000 D. 630,000 How much should NOREEN INC record interest and retirement of its liability to MENDOZA INC on December 31, 2020? 3. C. 330,000; 3,630,000 D. 630,000; 3,630,000 A. None B. 300,000; 3,600,000
NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of NOREEN on January 1,2019? A. 1,500,000 B. 1,815,000 C. 3,000,000 D. 3,630,000 Using the information above, what is the interest expense for 2019? 2. A. None B. 300,000 D. 630,000 How much should NOREEN INC record interest and retirement of its liability to MENDOZA INC on December 31, 2020? 3. C. 330,000; 3,630,000 D. 630,000; 3,630,000 A. None B. 300,000; 3,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Problem 13
NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000.
NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000.
1.
Assuming a 10% is imputed in the agreement, how much is the liability ofNOREEN on January
1, 2019?
A. 1,500,000
B. 1,815,000
C. 3,000,000
D. 3,630,000
Using the information above, what is the interest expense for 2019?
None
B.
2.
C. 330,000
D. 630,000
300,000
How much should NOREEN INC record interest and retirement of its liability to MENDOZA
INC on December 31, 2020?
3.
A. None
300,000; 3,600,000
B.
C. 330,000; 3,630,000
D. 630,000; 3,630,000
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