On December 31, 2020, Ethan Company signed a five-year, non-cancelable lease for a machine with Best Company. The terms of the lease called for Ethan Company to make annual payments of P800,000 in advance starting on December 31, 2020 and every December 31 thereafter. The machine has an estimated useful life of six years and a P40,000 unguaranteed residual value at the end of the five-year lease term. The machine reverts back to the lessor at the end of the five-year lease term. Ethan Company uses the straight-line method of depreciation for all of its depreciable assets. What is the carrying amount of the Right-of-Use Machine on December 31, 2021? (Use three decimal places)

On December 31, 2020, Ethan Company signed a five-year, non-cancelable lease for a machine with Best Company. The terms of the lease called for Ethan Company to make annual payments of P800,000 in advance starting on December 31, 2020 and every December 31 thereafter. The machine has an estimated useful life of six years and a P40,000 unguaranteed residual value at the end of the five-year lease term. The machine reverts back to the lessor at the end of the five-year lease term. Ethan Company uses the straight-line method of depreciation for all of its depreciable assets. What is the carrying amount of the Right-of-Use Machine on December 31, 2021? (Use three decimal places)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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