On December 31, 2020, ABC Co. purchased a machine under a deferred payment contract where it is required to make 8 annual payments of P140,000 beginning December 31, 2021. IF interest rate is 8%, the purchase price of the machine must be closest to a.P1,389,190 b.P1,120,000 c. P 868,900 d. P804,530

On December 31, 2020, ABC Co. purchased a machine under a deferred payment contract where it is required to make 8 annual payments of P140,000 beginning December 31, 2021. IF interest rate is 8%, the purchase price of the machine must be closest to a.P1,389,190 b.P1,120,000 c. P 868,900 d. P804,530

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2020, Apple, gave a loan to Samsung Nokia Inc. amounting to P1,000,000 and received a two-year 12%, 1,000,000 note. The note calls for annual interest to be paid each January 2. Apple collected the interest payment in 2021 as scheduled. The company incurred origination cost amounting to P57,851, 40% of which had been charged to Samsung Nokia Inc. The yield rate on the loan is arranged at 10%. On December 31, 2021, however, based on the changing market conditions and Samsung Nokia Inc.'s financial struggles, only P900,000 is expected to be collected by Apple. The P900,000 principal amount is expected to be collected on December 31, 2020, 2021, and 2022. By December 2021, Apple assessed that the market's time value for money is computed at 8%. How much loss should be recognized in relation to the loan on December 31, 2021? Use 9 decimal places for the present value factors. Kindly show your solution.
On July 01, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand-alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the total amount of interest earned in 2021?
Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following information: Annual rental payable at beginning of each lease year P 400,000; Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Present Value of an annuity of 1 advance for 10 periods at 10 periods at 14%. 0.27 Myro has the option to purchase the machine on May 1, 2024, by paying P 500,000, which approximate the expected fair value of the machine on the option exercise date. On May 1, 2014, how much should Myro record the leased asset?
On January 1, 2020, Apple, gave a loan to Samsung Nokia Inc. amounting to P1,000,000 and received a two-year 12%, 1, 000 note. The note calls for annual interest to be paid each January 2. Apple collected the interest payment in 2021 as scheduled. The company incurred origination cost amounting to P57,851, 40% of which had been charged to Samsung Nokia Inc. The yield rate on the loan is arranged at 10%. On December 31, 2021, however, based on the changing market conditions and Samsung Nokia Inc.'s financial struggles, only P900,000 is expected to be collected by Apple. The P900,000 principal amount is expected to be collected on December 31, 2020, 2021, and 2022. By December 2021, Apple assessed that the market's time value for money is computed at 8%. How much loss should be recognized in relation to the loan on December 31, 2021? Use 9 decimal places for the present value factors. Kindly show your solution.
Determine the exact simple interest on P 5,000.00 for the period from June 10 2015 to November 21, 2020 if the rate of interest is 21% O P5,730.41 P5,722.01 P5,733.61 O P5,727.79 A contractor can buy trucks for P950,000 each or rent them for P1,500 per
A company expects to retire an existing machine at the end of 2024 and will replace it with a new machine for the same task at an estimated cost of P60,000. The old machine is expected to be sold for P5,000 when it is replaced. To provide for the replacement, the company intends to deposit the following amounts in an account earning interest at 8% compounded quarterly: P20,000 at the end of 2021 P15,000 at the end of 2022 P10,000 at the end of 2023 What additional amount is needed at the end of 2024 to purchase the new machine? Draw the CFD.
On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the cost savings/(incremental cost) attributable to the FRA?
Weat Subject: acounting
On January 1, 2020, Tamia & Co, sold a machinery and immediately leases it back for a period of 4 years. Remaining useful life of the machinery is 10 years. Selling price is P3,000,000. Carrying amount of the machinery is P2,250,000. Annual rental is P400,000 payable every December 31, starting December 31, 2020. Implicit rate is 10% and PV factor for ordinary annuity at 10% for 4 periods is 3.169865. If the fair value of the sold and leased asset is P3,200,000, what amount of gain/loss related to the right transferred shall be recognized by the seller-lessee? a. Zero b. 950,000 c. 435,796 d. 514,204
19.
To finance the purchase of the machine by issuing RM6 million, six-year, zero interest-bearing note to the seller on 1 July 2019. The expected interest rate for the note is 5.5%. The company is expected to pay off the note in five RM1 million instalments, at every financial year end. The company employs effective interest method. Calculate the yearly installment and interest. Assume financial year ends December.
Hips Company purchased an asset with a list price of P130,000 to be delivered on July 1, 2021 with the following payment terms:  A deposit of P26,000 is due on June 1, 2021 and cash on delivery of P26,000 is due on July 1, 2021.  Three annual payments of P26,000 starting July 1, 2022 and thereafter.  The seller waived its normal interest charge of 6% per year. The equipment is expected to last 5 years, with a residual value of P26,000. Hips has a December 31 yearend. What should be the depreciation expense for the year ended December 31, 2021