On January 12019, Aquarius Co. sold a machine with a cost of P500,000 for P800,000The buyer paid a down of P20( and signed a noninterest bearing note for P600,000 payable in equal annual installment of P200,000 every December 31. The prevailing interest rate for a note of this type is 10%The present value of an ordinary annuity of for three periods at 10% is 2.4869. How much is the gain on sale of the machine?
On January 12019, Aquarius Co. sold a machine with a cost of P500,000 for P800,000The buyer paid a down of P20( and signed a noninterest bearing note for P600,000 payable in equal annual installment of P200,000 every December 31. The prevailing interest rate for a note of this type is 10%The present value of an ordinary annuity of for three periods at 10% is 2.4869. How much is the gain on sale of the machine?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 12019, Aquarius Co. sold a machine with a cost of P500,000 for P800,000The buyer paid a down of P20( and signed a noninterest bearing note for P600,000 payable in equal annual installment of P200,000 every December 31. The prevailing interest rate for a note of this type is 10%The present value of an ordinary annuity of for three periods at 10% is 2.4869. How much is the gain on sale of the machine?
Transcribed Image Text:On January 1, 2019, Aquarius Co. sold a machine with a cost of P500,000
for P800,000. The buyer paid a down of P200,000 and signed a
noninterest bearing note for P600,000 payable in equal annual installmen
of P200,000 every December 31. The prevailing interest rate for a note of
this type is 10%. The present value of an ordinary annuity of 1 for three
periods at 10% is 2.4869. How much is the gain on sale of the machine?
Your answer
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education