TRUE or FALSE 1. If an equipment costing P93,000 is bought by paying P30,000 as a downpayment and the remaining P63,000 in 30 days, the owner's equity or capital is increased by P93,000. 2. If an equipment is bought by paying P20,000 as a down payment and the remaining P40,000 in 30 days, total liabilities are increased by P20,000.

TRUE or FALSE 1. If an equipment costing P93,000 is bought by paying P30,000 as a downpayment and the remaining P63,000 in 30 days, the owner's equity or capital is increased by P93,000. 2. If an equipment is bought by paying P20,000 as a down payment and the remaining P40,000 in 30 days, total liabilities are increased by P20,000.

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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3. On January 1, 2022, JPIA Company capitalized a new word processing software package that it had developed. The total cost recorded was P9, 000, 000 and the product is expected to generate revenue for three years. Revenue from the sale of software for 2022 was P24, 000, 000 and the total expected revenue for the three years is P80, 000, 000. The net realizable value of the software was P7, 200, 000 on December 31, 2022. What amount should be charged to software amortization expense for the year ended December 31, 2022?
5) ROT Ltd. is considering whether it should buy or lease equipment that costs 1.60 crores and has a post- tax salvage value of 16 lakh at the end of its life of 5 years. A finance company, CBK Ltd. has offered to lease the equipment for 5 years at annual lease payments of 40 lakh at the beginning of each year. CBK Ltd. will also maintain the equipment which would otherwise cost ROT Ltd. 2 lakh p.a. on an average. The owner of the equipment can claim depreciation on WDV basis at 25% each year. The company's tax rate is 30% and its cost of borrowing is 14.29% and the overall weighted average cost of capital is 15%. Should the company buy the asset or lease the equipment if the NPV of the equipment is - 12 lakh (negative)?
I need perfect answer otherwise I will give downwards
2(e) A plant costs PKR 860,000 now requires PKR 86,000 annually to maintain and has salvage value of Rs. 258,000 at the end of eight years. The business can generate additional revenue for Rs. 50,000 per annum by installing new plant. Your time value of money is 9%. Please advise the business should install new plant or not?
The costs incurred in the manufacture of 75,000 units of a product are: Direct materials $80,000 Direct labour $15,000 Variable overheads $32,000 Fixed overheads $130,000 If output increases by 15%, what will be the effect, if any, on the variable cost per unit? Show solution
Blossom Company is considering the acquisition of Splish, Inc. To assess the amount it might be willing to pay, Blossom makes the following computations and assumptions. A. Splish, Inc. has identifiable assets with a total fair value of $6,014,000 and liabilities of $3,728,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Splish, Inc. B. Splish, Inc's pretax incomes for the years 2020 through 2022 were $470,600, $572,300, and $371,100, respectively. Blossom believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: Depreciation on Buildings (each year) 384,800 Depreciation on Equipment (each year) 31,100…
For a construction firm using the cost recovery method, if costs exceed billings on some contracts by P1,000,000 and billings exceed costs by P800,000 on others, the contracts should ordinarily be reported as a a. Current asset of P1,000,000 and a current liability of P800,000 b. current asset of 200,000
Option 1 - A company is currently paying its employees $0.38 per kilometre to drive their own cars on company business. Option 2 - The company is considering supplying employees with cars, which would involve purchasing at $25000, with an estimated three year life, a net salvage value of $8000, taxes and insurance at a cost of $900 per year, and operating and maintenance expenses of $0.22 per kilometre. If the interest rate is 10% and the company anticipates an employee's annual travel to be 22,000 kilometres, answer the following questions: (Keep 2 decimal places) The equivalent cost per km for Option 2 is $ The equivalent cost per km for Option 1 is $ The cheaper option for the company is
3. Deontay Jenkins LLC Engineering firm borrowed $100,000 to purchase a new AC unit for the building. The annual loan payment is $8,880 at 8% per year for 30 years. The company's CEO decides to make $10,000 annual payments instead, in hopes of paying off the loan sooner. Using the Linear interpolation method, how long will it take (to the nearest years and months) to repay the loan using the CEO's decision?