roblem 3: On January 1, 2012, Enrich Company purchased a machine under the following terms: a. 100,000 downpayment b. four annual payments of P200, 000, the first installment to be paid on December 31, 2012 The fair value of the machine is not clearly determinable on the date of acquisition. The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10% for four periods are: Present value of 1 .683 Present value of ordinary annuity of 1 3.170 Required: How much is the cost of the machine_________________ what is the rule in solving the problem?
Problem 3:
On January 1, 2012, Enrich Company purchased a machine under the following terms:
a. 100,000 downpayment
b. four annual payments of P200, 000, the first installment to be paid on December 31, 2012
The fair value of the machine is not clearly determinable on the date of acquisition.
The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10% for four periods are:
Present value of 1 .683
Present value of ordinary annuity of 1 3.170
Required: How much is the cost of the machine_________________
what is the rule in solving the problem?
Problem 4:
Ocean Company recently acquired several items of property, plant and equipment. The transactions are as follows:
1. Purchases a building for P1, 000, 000 in cash and 50, 000 shares of Ocean company with P100 par value which sold for P120 on transaction date
2. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1, 500, 000.
3. Acquired a machinery for cash. The machinery was priced at P800, 000 and a 5% cash discount is allowed
4. Acquired an equipment for P200, 000 by issuing a 60-day, 12% note.
Required:
Determine the cost of the ff:
Building_____________________
Land______________________
Machinery_________________
Equipment_____________________
what is the rule in solving the problem?
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