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On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places.

On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places.

FINANCIAL ACCOUNTING
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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Under leases

. How much is the gain on leașeback recorded on January 1, 2021?* For numbers 3 to 5, please refer to the following problem: On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places. a. 808,000 b. 650,100 c. 124,800 d. 457,460
Transcribed Image Text:. How much is the gain on leașeback recorded on January 1, 2021?* For numbers 3 to 5, please refer to the following problem: On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places. a. 808,000 b. 650,100 c. 124,800 d. 457,460
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