On January 1, 2019, Mar Co. sold a piece of equipment acquired ten years ago for P35,000. At the time of sale, the equipment had an accumulated depreciation of P24,000. Mar received a non-interest-bearing note for P30,000 in exchange for the equipment. The note is due on January 1, 2021. There is no readily available market value for the equipment, but the current market rate of interest for comparable notes is 12%. Present Value of single payment is at 12% for 2 periods is 0.7972 while Present Value of ordinary annuity is at12% for 2 periods is 1.6901 How much is the gain on sale of equipment in 2019 and the interest revenue in 2020, respectively?
On January 1, 2019, Mar Co. sold a piece of equipment acquired ten years ago for P35,000. At the time of sale, the equipment had an accumulated depreciation of P24,000. Mar received a non-interest-bearing note for P30,000 in exchange for the equipment. The note is due on January 1, 2021. There is no readily available market value for the equipment, but the current market rate of interest for comparable notes is 12%. Present Value of single payment is at 12% for 2 periods is 0.7972 while Present Value of ordinary annuity is at12% for 2 periods is 1.6901 How much is the gain on sale of equipment in 2019 and the interest revenue in 2020, respectively?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2019, Mar Co. sold a piece of equipment acquired ten years ago for P35,000. At the time of sale, the equipment had an
Present Value of single payment is at 12% for 2 periods is 0.7972 while Present Value of ordinary annuity is at12% for 2 periods is 1.6901
How much is the gain on sale of equipment in 2019 and the interest revenue in 2020, respectively?
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