primary method of selling products. The entity's, Marianas Company adopted the policy of leasing as the product is a small cargo vessel. Marianss Company constructed such a cargo vessel for Jade Company at a The terms of the lease provided for annual advance payments of P2,500,000 to be paid over 10 years with the ownersh transferring to Jade Company at the end of the lease period It is estimated that the cargo vessel will have a residu value of P1,600,000 at that date. The lease payments began at the beginning of current yes- Marianas Company incurred initial direct coet of P500 in financing the lease agreement with Jade Company T sale price of the cargo vessel is P14,875,000. Financing the construction was at a l4% rate. The prese value of an annuity due of I at 14% for 10 periods is 596 i What amount should be reported as gross profit on sal for the current year? * 5,875.000 b 6,375,000 C 4,275,000 d 4,775,000 2 What is the unearned interest income at the beginning of current year 10,125,000 1. 11.725,000 ப625 000 8.525 000 3 What is the interest inoome for the current year a 2082,500 b 1732,500 C 2,306,500 d 1.956,500

primary method of selling products. The entity's, Marianas Company adopted the policy of leasing as the product is a small cargo vessel. Marianss Company constructed such a cargo vessel for Jade Company at a The terms of the lease provided for annual advance payments of P2,500,000 to be paid over 10 years with the ownersh transferring to Jade Company at the end of the lease period It is estimated that the cargo vessel will have a residu value of P1,600,000 at that date. The lease payments began at the beginning of current yes- Marianas Company incurred initial direct coet of P500 in financing the lease agreement with Jade Company T sale price of the cargo vessel is P14,875,000. Financing the construction was at a l4% rate. The prese value of an annuity due of I at 14% for 10 periods is 596 i What amount should be reported as gross profit on sal for the current year? * 5,875.000 b 6,375,000 C 4,275,000 d 4,775,000 2 What is the unearned interest income at the beginning of current year 10,125,000 1. 11.725,000 ப625 000 8.525 000 3 What is the interest inoome for the current year a 2082,500 b 1732,500 C 2,306,500 d 1.956,500

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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