Royal Company sold vehicles on installment basis. On January 1, 2020, a Honda costing P800,000 was sold for P1,200,000 on installment basis. An old Honda was accepted as down payment with trade in value of P350,000 and the balance is payable in equal annual installment for 5 years starting December 31, 2020. The trade in has an estimated selling price of P400,000 after reconditioning cost of P50,000. The normal profit to be considered in the fair value computation is 10% and the estimated cost to sell is P10,000. The market rate of interest is 12% (Round off PV factor to 4 decimal places). 1.How much is the Trade In to be reported on December 31, 2020? 2. how much is the Installment Sales in 2020? 3.how much is the Interest Revenue in 2020
Royal Company sold vehicles on installment basis. On January 1, 2020, a Honda costing P800,000 was sold for P1,200,000 on installment basis. An old Honda was accepted as down payment with trade in value of P350,000 and the balance is payable in equal annual installment for 5 years starting December 31, 2020. The trade in has an estimated selling price of P400,000 after reconditioning cost of P50,000. The normal profit to be considered in the fair value computation is 10% and the estimated cost to sell is P10,000. The market rate of interest is 12% (Round off PV factor to 4 decimal places).
1.How much is the Trade In to be reported on December 31, 2020?
2. how much is the Installment Sales in 2020?
3.how much is the Interest Revenue in 2020
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