Problem 3 Salameda sold a tract of land with a carrying amount of P3,000,000 to Hacienda Pontiveros on July 1, 2018. 1,200,000 was collected on the date of sale, and the balance of P2,800,000 is collectible in four annual installments P902,500, consisting of principal and 11% interest on the unpaid balance. The first annual installment is due July 1, 2019. 1. How much should be the interest income for the year December 31, 2019? a. 121,303 b. 154,000 c. 275,303 d. 308,000 2. What amount of notes receivable should be classified as noncurrent assets on December 31, 2019? a. 2,800,000 b. 1,210,500 c. 1,545,605 d. 2,205,500

Problem 3 Salameda sold a tract of land with a carrying amount of P3,000,000 to Hacienda Pontiveros on July 1, 2018. 1,200,000 was collected on the date of sale, and the balance of P2,800,000 is collectible in four annual installments P902,500, consisting of principal and 11% interest on the unpaid balance. The first annual installment is due July 1, 2019. 1. How much should be the interest income for the year December 31, 2019? a. 121,303 b. 154,000 c. 275,303 d. 308,000 2. What amount of notes receivable should be classified as noncurrent assets on December 31, 2019? a. 2,800,000 b. 1,210,500 c. 1,545,605 d. 2,205,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Problem 8-34 (LO. 2) Weston acquires a new office machine (seven-year class asset) on August 2, 2017, for $75,000. This is the only asset Weston acquired during the year. He does not elect immediate expensing under § 179. He claims the maximum additional first-year depreciation deduction. On September 15, 2019, Weston sells the machine. Click here to access the depreciation tables in the textbook. If required, round your answers to the nearest dollar. a. Determine Weston’s cost recovery for 2017 and 2018.2017: $fill in the blank 12018: $fill in the blank 2 b. Determine Weston’s cost recovery for 2019.$fill in the blank 3
Problem J: On January 1, 2021, the Reddick Company purchased a mining right for P30,000,000. The mine's recoverable ore reserves are estimated to be 4,000,000 tons. Following the extraction of all ore, the company will be obligated by law to return the land to its original state. The present value of the restoration cost is P2,000,000. The company estimated that the property may be sold for P5,000,000. At a cost of P6,000,000, roads were built and other development costs were invested to aid in the extraction and transportation of the mined ore in early 2021. 200,000 tons of ore were extracted and sold in 2021. A new study conducted by a new mining engineer on December 31, 2022, revealed that 5,000,000 tons of ore were available for mining. 225,000 tons of ore were mined and sold in 2022. How much depletion expense should be recognized in 2022?
ces On May 12, 2022, Nelson Incorporated purchased eight passenger automobiles for its business. Nelson did not make a Section 179 election to expense any portion of the cost of the automobiles, which are five-year recovery property subject to the half-year convention. Assume there is no bonus depreciation or Section 179 deduction. Use Table 7-1 and Table 7-2. Use the below table for annual depreciation deduction for year 2022 to 2025: 2022 2023 2024 2025 and subsequent years $ 11, 200 18,000 10,800 6,460 Required: a. Compute Nelson's depreciation deduction with respect to the automobiles for 2022 and 2023 assuming the automobiles were Mini Coopers costing $14,300 each. b. Compute Nelson's depreciation deduction with respect to the automobiles for 2022 and 2023 assuming the automobiles were Cadillacs costing $60,000 each. Complete this question by entering your answers in the tabs below. Required A Required B
MC19 The Diane Company has a single investment property acquired on July 1, 2019 for P11,400,000. The property has an estimated useful life of 40 years and an estimated residual value of P600,000. The company's accounting period ends on December 31 and uses the straight-line method of depreciation, computed to the nearest month. The fair values of the property at the end of each year follows: 2019 - P11,700,000 2020 - P11,960,000 2021 - P12,000,000 2022 - P11,700,000 Using the cost model, what is the amount reported in the 2022 profit or loss? P135,000 P270,000 P300,000 P(300,000) a. b. с. d. MC20 Use data of MC19. Under the fair value model, what is the amount reported in the 2022 profit or loss? P135,000 P270,000 P300,000 P(300,000) a. b. с. d.
Finance Assume that Tim Corporation has 2020 taxable income of $240,000 for purposes of computing the $179 expense. It acquired the following assets in 2020: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) ASSET PURCHASE DATE BASIS Furniture (7-year) December 1$ 450,000 Computer equipment (5-year) February 28 $90,000 Copier (5-year) July 15 $30,000 Machinery (7-year) May 22 480,000 Total $ 1,050,000 c. What would Tim's maximum depreciation expense deduction be for 2020 if the machinery cost $3,500,000 instead of 480,000 and assuming no bonus depreciation?
Question 6. John & Co. purchased machinery for $21,000 on 1st April 2021. The estimated life of the machinery is 10 years, after which its residual value will be $1,000 only. Find the amount of Annual Depreciation according to the Fixed Installment Method.
Exercise 14-20 (Algorithmic) (LO. 3) Sebastian purchases two pieces of equipment for $161,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $112,700 and that of the second piece of equipment is $177,100. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is $ 43,953 X and $ 108,031 X for the second piece of equipment. Show Transcribed Text 1st equip 2nd equip 1st ratio 2nd ratio 1st basis 2nd basis S 112700 177100 289800 SUM(E10:E11) 0.39 =E10/(E12) 0.61 =E11/(E12) C 43828 E10 E14 108228 =E11*E15 112700 177100 289800 -SUM(G10:G11) 0.39 0.61 43953 =G10 G14 108031 =G11 G15
In 2021, TPC Incorporated sold investment land with a $474,000 book and tax basis for $775,000. The purchaser paid $100,000 in cash and gave TPC a note for the $675,000 balance of the price. In 2022, TPC received a $105,500 payment on the note ($67,500 principal + $38,000 interest). Assuming that TPC is using the installment sale method, compute its gain recognized in 2022.
Exercise 13-29 (Algorithmic) (10.3) Sebastian purchases two pieces of equipment for $147,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $102,900 and that of the second piece of equipment is $161,700. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is X and I X for the second piece of equipment.
Question 4 On July 1, 2022, Pepperpot Company made a lump sum purchase of an office building, including the land and some fixtures, for cash of $550,000. The tax assessments for the past year reflected the following: Land, $48,000; Building, $168,000; and Fixtures, $24,000. Pepperpot believes they will use the building for another 20 years at which time they expect to sell it of $45,000. The fixtures only have a five year life and Pepperpot expects they will have a residual value of $2,000 when they are sold. Pepperpot depreciates their real estate holdings on a straight line basis. All fixtures are depreciated using declining balance method. a. b. c. Prepare the journal entry to record the acquisition. Show your work. Prepare any year end adjustments required. Show how the assets will be presented on the December 31, 2022 financial statements.
QUESTION 1 Scott Industries had the following transactions during 2022: 1. Acquired an office building on three acres of land for a lump-sum price of $2,000,000. According to independent appraisals, the fair values were $1,325,000 and $790,000 for the building and land, respectively. A cash down payment of $500,000 20-Jan was made with the remainder financed. 2. Purchased equipment paying $19,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in five annual installments of $19,000 on the anniversary date of the contract. Based on Cool Globe's 8% borrowing rate for such transactions, the implicit interest cost is $19,139. 3-Feb 3. Received a gift of land and building in Twin Pines Park as an inducement to 15-Mar relocate. The land and buildings have fair values of $39,000 and $395,000. Required: Pepare the journal entries for the transactions above. Round journal entry amounts to the nearest whole dollar. Date Accounts Debit Credit…
Problem 4 LLL company has an equipment with carrying value of P350,000 and with remaining estimated life of 5 years. On January 1, 2022, the LLL Company entered into an exchange transaction with Orange Company to transfer the equipment satisfied the requirements of IFRS 15 "Revenue from Contracts with Customers". The transfer proceeds amounted to P450,000 while the annual rental payable at the end of each year amounts to P100,000 with an incremental borrowing rate of 8%. LLL immediately leased back the said property for the remaining life of the property on the same date. The transfer proceeds is at fair value. 28. What is the cost of the right-of-use asset on the inception of the lease contract?