On May 3, the Napco Co. extends an offer of $500,000 for a building that had originally been priced for sale at $300,000. On Aug 28, Napco accepted the seller’s counteroffer of $200,000. At what price should Napco record the cost of the building on its record?
Q: The purchase price for an acquisition is $5,000,000. The buyer pays $15,000 for lender required…
A: Capital expenditure refer to that expenditure which is incurred by a business for its long term…
Q: On July 1, 2018, Apache Company sold a parcel of undeveloped land to a construction company for…
A: The given information is: On July 1, 2018, Apache Company, a real estate developer, sold a parcel of…
Q: On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The…
A: Step 1: 1. Compute the amount at which the cost of the building should be recorded as follows:
Q: On May 7, 2021, Permission to Dance (PTD) Corporation sold a tract of land for P70,000 that resulted…
A: The correct answer for the above mentioned answer is given in the following steps for your…
Q: PLEMACOLA, Inc. sold a piece of land on January 1, 2021. The company purchased the land for…
A: In Zero interest note or bond, the amortization process is quite simple as there is no coupon or…
Q: Blossom Company signed a long-term noncancelable purchase commitment with a major supplier to…
A: A journal entry is used to record a business transaction in the company's accounting records.…
Q: On October 1, 2024, a company purchased a piece of land by agreeing to pay the seller $450,000 in…
A: The notion of present value has applications in the fields of finance, economics, and investment…
Q: Discuss the implication of the transactions and state the journal entries on January 1, 2020
A:
Q: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton…
A: The lease is an agreement in which one person provides the right to use the asset and in exchange…
Q: hen immediately signed 99,057, due at the start o n of the lease. HMD's imp
A: The journal entry is given as,
Q: Rigg Owusu Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: On May 1, 2020, Splish Company enters into a contract to transfer a product to Eric Company on…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: 42) On January 1, 2019, Pet Company purchased a machine. The seller agreed that a total of $27,000…
A: The amount to be debited in the machinery account will be the total present value of the cash flows…
Q: On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party)…
A: Given:rental payments=$10,000 Executor costs = $7,000 annually
Q: On January 1, 2021, Central Industries leased a high-performance conveyer to Dynamic Company for a…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: R) please answer asap. Coronado Inc. leased a new crane to Flint Construction Inc. under a…
A: ASPE stands for Accounting Standards for Private Enterprises. It is a set of accounting standards…
Q: Elton Electronics leases testing equipment to Startup Corporation. The equipment is not specialized…
A: Approach to solving the question: For better clarity of the solution, I have attached the Excel…
Q: To raise operating funds, National Distribution Center sold its office building to an insurance…
A: Lease Payment There two types of leases which are involved in the accounting. One is Operating…
Q: 020 year, Byrd Corporation incurred costs of $60000 for leasehold improvements to its newly rented…
A: (CCA) is a system that enables businesses to deduct the depreciation expense of capital assets…
Q: Sunshine offers a contract to Cape Country Club, which is comprised of 10 patio set plus…
A: The objective of the question is to identify the performance obligations in the contract, calculate…
Q: Morley Manufacturing has notes receivable that have a fair value of P810,000 and a carrying amount…
A: Note receivable is the amount that is due to be received by the company on the note issued. It is an…
Q: On April 1, 2018, the Apex Corporation sold a parcel of underdeveloped land to the Applegate…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: A company sells a stove to a customer for a price of $2,000 which includes the installation. The…
A: Here asked for multi question we will solve for first question as per guidelines. If you need…
Q: Elton Electronics leases testing equipment to Startup Corporation. The equipment is not specialized…
A: The objective of the question is to calculate the principal balance in the Net Investment in Lease —…
Q: cost of equipment?
A: Purchase term 2/10, n/30 means 2% discount is available for payment within 10 days, the credit…
Q: To raise operating funds, National Distribution Center sold its office building to an insurance…
A: A lease is a contract in which a landlord (the lessor) offers the tenant (the lessee) the right to…
Q: Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments…
A: Preparation of entry for newton labs and brookline instrument are as follows
Q: Required a. Prepare all related journal entries (including simple narration) for the year ended 31…
A: Fair Value Model in Investment Assets A rental property is initially valued at cost. According to…
Q: On April 7, 2024, Crane Corporation purchased two excavators at auction for a combined total cost of…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Prepare the entry to record the purchase assuming the company uses a periodic inventory system (List…
A: Journal entries are entered into the books of account by using the principle of double-entry…
Q: Maris Co. purchased a machine on January 1, 2021, for $2,500,000 for the express purpose of leasing…
A: Magazine entries or journal entries are used to file transactions in a organization's accounting…
Q: Miriam Corp. began leasing retail space at Oberlin Village in Raleigh, NC, on December 1, 2022.…
A: Attributable costs (not in nature of minor repairs) to the assets are capitalised to asset account…
Q: Coa Corporation recently needed to find temporary inventory storage space when transitioning from an…
A: Finance lease is the lease where the lessor transfer the ownership rights to the lessee at the end…
Q: sing the percentage-of-completion method, prepare the journal entries for 2020 and 2021. (Use M osts…
A: Construction contract:A construction contract is a long-term contract because the work of the…
Q: To raise operating funds, C Incorporated sold its office building to an insurance company on January…
A: Journal A general journal entry is used to visualize the business transactions of any organization.…
Q: Assume that Win Co. is considering disposing of equipment that cost $74,582.00 and has $52,207.40 of…
A: Correct option:c. $9,427.05 Show formula version of the detailed solution sheet for a better…
Q: On April 1, 2021 Summer Time Pools agreed to install a pool for the Stafford family. Due to the…
A: Interest expense is the expense that a person or entity has to pay on borrowed bonds.
Q: (a) assess whether the transfer of the machinery is a sale or not a sale. (b) prepare the relevant…
A: Lease is a agreement between two parties and lease takes place when one party is not having the…
Q: On January 1, 2025, Oriole Co. sells land for which it had paid $707,400 to Sargent Company,…
A: Journal entries are the primary reporting of the business transactions in the books of accounts.…
Q: Concord Company signed a long-term noncancelable purchase commitment with a major supplier to…
A: A journal entry is used to record a business transaction in the company's accounting records.…
On May 3, the Napco Co. extends an offer of $500,000 for a building that had originally been priced for sale at $300,000. On Aug 28, Napco accepted the seller’s counteroffer of $200,000.
At what price should Napco record the cost of the building on its record?
Cost principle refers to when any transaction is recorded at historical price.
Step by step
Solved in 2 steps
- Taylor Construction Inc. signed a contract with FSU to build a student residential building with two million dollars by 2021 August; FSU can only pay 1.8 million dollars if Taylor cannot complete the construction by September 1. According to the consideration of the four transaction price types, which type is for the following transaction?Elton Electronics leases testing equipment to Startup Corporation. The equipment is not specialized and is delivered on January 1, 2023. The fair value of the equipment is $118,000. The cost of the equipment to Elton is $113,000 and the expected life of the testing equipment is 8 years. Elton incurs initial direct costs of $10,000, which they elect to expense. The lease term for the equipment is 8 years, with the first payment due upon delivery, and seven subsequent annual payments beginning on December 31, 2023 and ending on December 31, 2029. Elton's implicit rate is 5% and they expect that collection of the $14,500 lease payments is probable.What is the principal balance in the Net Investment in Lease — Sale Type account after the second payment on December 31, 2023? Group of answer choices $98,402 $83,902 $113,000 $73,597On May 7, 2021, Jimin Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain on the sale. PTD agreed to accept one payment of P35,000 on August 15 and a second payment of P35,000 on December 15. PTD had a calendar year-end. What amount of gain was reported during the second, third, and fourth quarters of the year from this sale?
- On January 1, 2021, Central Industries leased a high-performance conveyer to Dynamic Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Central. The equipment cost Central $1,912,000 and has an expected useful life of five years. Central expects the residual value at December 31, 2025, will be $600,000. Negotiations led to the lessee guaranteeing a $680,000 residual value. Equal payments under the finance/sales-type lease are due on December 31 of each year with the first payment being made on December 31, 2021. Dynamic is aware that Central used a 5% interest rate when calculating lease payments.What is the amount that the lessee will record as Right-of-use-Asset and Lease Liability ?On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of $100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is $2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswell’s incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of $7,000 annually,…On January 1, 2020, Tom Co (A seller-lessee) sells a building to MacCo (an unrelated buyerlessor) for cash of $2,000,000. The fair value of the building at that time is $1,800,000; the carrying amount immediately before the transaction is $1,000,000. At the same time, TomCo enters into a contract with MacCo for the right to use the building for 19 years, with annual payments of $120,000 payable at the end of each year. The interest rate implicit in the lease is 4.5%, which results in a present value of the annual payments of $1,459,200. The transfer of the asset to MacCo has been assessed as meeting the definition of a sale under PSAK 72. Discuss the implication of the transactions and state the journal entries on January 1, 2020
- Makati Inc. acquires a building on February 1, 2020 at a cost of 5,500,000. The building has an estimated useful life of 40 years and an estimated salvage value of 500,000. Question 1. What is the journal entry to record the purchase of building? Question 2. What is the adjusting entry on December 31 assuming the company prepares it's financial statements on this date . Question 3. What is the amount of expense to be recognized for 2020? Question 4. What is the book value of the building as of December 31,2020? Please answer it completely. Don't answer if you don't answer it completely. Thanks.On July 1, 2021, Catlyn Company sold a parcel of undeveloped land to a construction company for $540,000. The book value of the land on Catlyn's books was $140,000. Terms of the sale required a down payment of 10% of the selling price and 9 annual payments of 10% of the selling price plus interest at an appropriate interest rate due on each July 1 beginning in 2022. Catlyn has no significant obligations to perform services after the sale. Calculate the balance in the deferred gross profit account in 2022 applying the installment sales method. (Please round answer to the nearest dollar, i.e. $86,666.67 should be interested as 86667).To raise operating funds, North American Courier Corporation sold its building on January 1, 2021, to an insurance company for $508,000 and immediately leased the building back. The lease is for a 10-year period ending December 31, 2030, at which time ownership of the building will revert to North American Courier. The building has a carrying amount of $470,000 (original cost $1,140,000). The lease requires North American to make payments of $89,908 to the insurance company each December 31. The building had a total original useful life of 30 years with no residual value and is being depreciated on a straight-line basis. The lease has an implicit rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:1. Prepare the appropriate entries for North American (a) on January 1, 2021, to record the transaction and (b) on December 31, 2021, to record necessary adjustments.2. Show how North American’s…
- On June 1, 2023, Cali Company entered into a contract to buy equipment for $15,000 from Belt Supply. The contract required Cali to pay $15,000 in advance on June 1, 2023. The equipment was delivered on July 3, 2023. The journal entry on Bolt's books to record the contract on June 1, 2023 includesOn January 2021 Bob Company sells an item of machinery to Jaison Company for its fair value of $300,000. The asset had a carrying amount of $120,000 prior to the sale. The sale represents the satisfaction of a performance obligation, in accordance with IFRS 15 Revenue from Contracts with Customers. Bob Company enters on to a contracte with Jaison Company for the right to use the asset for the next five years. Annual payments of $50,000 are due at the end of each year. The interest rate implicit in the lease is 10%. The present value of the annual lease payments is $190,000. The remaining useful life of the machine is much greater than the lease term. Required: 1. Explain how it will be recorded in the books of Bob Company and show the necessary journal entries. 2. Why do companies prefer lease financing instead of direct purchase? Explain any three valid reasons.On January 1, 2021, Crucell N.V. sold an aeroengine along with a 4 year maintenance agreement to Sleazyjet Airlines for $1164. The standalone selling price of an engine is $776, while the standalone selling price of a maintenance contract is $194 per year. On January 1, the aeroengine was delivered to Sleazyjet. Ignoring the time value of money, the company should record revenue on January 1 of: 1164 931 970 None of these answers is correct 776 582
