What is the correct cost of the investment property at acquisition date?
Q: Does a large, international accounting firm seem appealing to you? What is the primary attraction of…
A: international accounting form are considered to be the largest firm. these forms are attraction…
Q: Required information (The following information applies to the questions displayed below) Hans runs…
A: Given that Hans runs a sole proprietorship. year 1231 Gains/losses Year 1 (65,000) Year 2…
Q: 1. & 2. Determine the type of accounting change and prepare the appropriate journal entry to record…
A: Introduction:- Deferred tax liability arises due to timing difference in the value of assets as per…
Q: Comfort Shoes Manufacturing Company began business on January 1, 2016. During its first year of…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: Your uncle has a taxable income of $85,142 last year. If he files as a head of household, what is…
A: As per 2021 tax rates Tax liability if status is head of household = $ 6220 + (85142-54201)*22% = $…
Q: Trillian Ltd. is considering replacing a piece of old machinery. The machine has a book value of…
A: Lets understand the basics. When there is two alternatives available then management always choose…
Q: The Bomb Pop Corporation sold ice cream equipment for $18,500. The equipment was originally…
A: Formula: Net book value of Asset = Asset value - Accumulated depreciation
Q: Coronado, Ltd. manufactures shirts, which it sells to customers for embroidering with various…
A: Variance analysis is an accounting method in which the difference between the…
Q: REVIEW: Use the following to answer questions 28 – 32 T&JR Corp reports the following income…
A: Calculation of Sales Sales = Net Sales + Sales Discounts Sales = $ 789,000 + $ 15,000 Sales = $…
Q: The famous singer
A:
Q: Opening Cash Balance Required Minimum Cash Balance Payment of Income taxes – 2nd Quarter…
A: A cash budget is an estimation of the future cash inflows and outflows of a business over a specific…
Q: Do you think that factory wages in total during the strike would be higher, lower, or the same…
A: Employees can contribute a part of their salary to individual accounts through a 401(k) element of a…
Q: Answer Needed for Part B only SALLAT Household Furnishings & Appliances is a family-owned business.…
A: The question is related to Cash Budget. Cash Budget is summary of cash receipts and cash payments…
Q: Identify the most important reasons for performing analytical procedures. b) Describe the broad…
A: Analytical procedure is the procedure which is carried out by the auditors at the preliminary stage…
Q: Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the…
A: 1 Evaluation of the financial advantage from the special order Particulars Amount in $ No of…
Q: following information applies to the questions displayed below.] January 1, 2021, Pet Friendly…
A: Cost Retail Beginning inventory…
Q: Q1: Mater Pasta Inc. has projected a sales volume of $1,432 for the second year of a proposed…
A: Operating cash flow = [(Sales – Costs) × (1 – Tax rate)] + (Tax rate × Depreciation expense) where,…
Q: The Canliss Milling Company purchased machinery on January 2, 2016, for $840,000. A five-year life…
A: Computation of depreciation Cost - residual value / useful life of assets $840,000 - $0/ 5 $168000…
Q: Cost indeXes are as 2021 Cost Retail Cost $105,400 $170,000 430,000 2,900 6,200 inning inventory…
A: The answer is stated below:
Q: What are some effective procedures for handling petty cash
A: The expression 'petty cash' alludes to a reserve of money set aside to pay little, day-to-day office…
Q: PA9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO…
A: The question is related to General Journal for the given transactions.
Q: Ebanks, Brown, and Thomas are partners. They carry on a business jointly as EBT surveyors and share…
A: The calculation of taxable income of each partner requires calculating the income from the income…
Q: osure requirements for lease by lesse 56. a. General Information about the lease b. A description of…
A: As per IFRS 16, Lease accounting and disclosure treatments are given.
Q: a) In each of the following parts, write an expression that shows the relationship among the listed…
A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Yuan Company has a cycle time of 3 days, uses Raw and In Process account (RIP) and expenses all…
A: Given as, Opening Raw Material 356000 Opening WIP 42600 Opening finished goods 45000
Q: D 2) Contribution Margin The following information is supplied about one of the…
A: Contribution margin- Contribution margin, or dollar contribution per unit, is the selling cost per…
Q: On January 2, 2017, Favorite Clothing Consignments purchased showroom fixtures for $12,000 cash,…
A: Depreciation is the systematic reduction of a fixed asset's reported cost until the asset's value is…
Q: The Bomb Pop Corporation sold ice cream equipment for $18,500. The equipment was originally…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Compute cost of goods sold and gross profit using the FIFO inventory costing method and using the…
A: The inventory can be valued using various methods as LIFO, FIFO and weighted average method of…
Q: Apex Chemicals Ltd acquires a delivery truck at a cost of $36,500 on 1 January 2016. The truck is…
A: Fixed assets are those assets which are held by the business for longer period of time for use in…
Q: Compute the amount of compensation expense for 2022 and 2023. (Enter your answers in millions…
A: Compensation Expenses ($ in million) 2022 $25.2 2023 $26.6
Q: Robin Inc. shows the following manufacturing costs for the Third quarter of the year: Production…
A: Lets understand the basics. In high low method, fixed cost and variable cost gets separate from the…
Q: On June 30, Year 3, Franza Company’s total current assets were $900,000 and its total current…
A: Formulas: Working Capital = Total Current assets - Total Current liabilities Current ratio = Total…
Q: 1. When reclassification is made from owner occupied property to investment property that will be…
A: Reclassification of owner occupied property to Investment property Treatment of gain or loss while…
Q: The president of Mission Inc. has been concerned about the growth in costs over the last several…
A: Total cost refers to the sum total of all the expenses born by a company while manufacturing its…
Q: b. Prepare the following consolidation entries required to prepare a consolidated balance sheet…
A: The question is based on the concept of Financial Accounting.
Q: Q1: Mater Pasta Inc. has projected a sales volume of $1,432 for the second year of a proposed…
A: Calculation of Operating Cash Flow Operating Cash Flow = Net Income + Depreciation Expense Operating…
Q: 10 lbs. @ $4 per Ibs. Produced 4,1 3 hrs. @ $21 perhr. Materials purchased 51 Etion 3,620 units 42…
A: Material price variance refers to the concept which computes the difference between the actual and…
Q: Sudbury ent, completed the following transactions in January: www
A: In USA there is no national level sales tax. Each and evry…
Q: March 1 Invested OMR 10,000 as capital March 3 Purchased office furniture for OMR 3,000 from Blossom…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: thod, and reported net income of $47,300. Determine what the net income would have been if the…
A: The allowance method involves setting money aside for future bad debts that are predicted to arise.…
Q: the “paperless payroll law” and many employers opted to give their employees pay cards instead of…
A: Pay method The pay method refers to how the employer distributes money to employees. Cash, check,…
Q: Sean and Co is a new pizza delivery business that was created by depositing £20,000 in a bank…
A: In the given question, details about Sean and Co's pizza delivery business details are mentioned.…
Q: The City of Wilmington, Delaware, has an Other Postemployment Benefit Trust Fund and a Tax…
A: The statement of fiduciary net position is a statement used to represent all the changes i.e.…
Q: A schedule of budgeted cash collections for trade receivables (sales on account) for each of the…
A: Below mentioned budget needs to be prepare budgeted cash collections for trade receivables…
Q: A downward adjustment in a firm's payout ratio means that the firm is reinvesting a : proportion of…
A: Retention ratio refers to those portions of net income of the company which is not paid by the…
Q: On January 1, 20x1, ABC sold a used vehicle with a historical cost of P2,000,0000 and accumulated…
A: Carrying amount of the note receivable will be calculated as under: = Annual Installment Receivable…
Q: 3
A: Herzberg's model says that , employee should be satisfied by his work. As per Herzberg's model…
Q: On 25 March 2020, Miracle Company bought a machine at $1,350,000 with an estimated useful life of 15…
A: Cost of Machine= $ 1350000 Useful life = 15 years Need to calculate depreciation as per the…
Q: Franklin Company established a predetermined fixed overhead cost rate of $36 per unit of product.…
A: Fixed overhead spending variance- The fixed cost spending variance is the distinction among the…
At the beginning of the current year, Zaijan Company acquired an investment property for 48 million. In the acquisition, Zaijan made a 30% down payment and issued a 5-year non-interest-bearing note fore the remainder. The equal amount of 6,720,000 is payable at the end of each year. The prevailing market rate of interest for similar instrument is 12%. To complete the transaction, Zaijan Company paid transaction costs amounting to 500,000. Round off present value factors to three decimal places.
What is the correct cost of the investment property at acquisition date?
a. 48,000,000
b. 39,125,600
c. 38,625,600
d. 24,225,600
Step by step
Solved in 2 steps with 2 images
- Hemingway Company purchases equipment by issuing a 7-year, $350,000 non-interest-bearing note, when the market rate for this type of note is 10%. Hemingway will pay off the note with equal payments to be made at the end of each year. Required: Prepare the journal entry to record Hemingway’s acquisition of the equipmHemingway Company purchases equipment by issuing a 7-year, $210,000 non-interest-bearing note, when the market rate for this type of note is 7%. Hemingway will pay off the note with equal payments to be made at the end of each year. Required: Prepare the journal entry to record Hemingway’s acquisition of the equipment.1. Action Company acquired an investment property with an installment price of P2,500,000. The acquisition of the property requires a down payment of 20% and a non-interest bearing note payable at the end of each year for five years. The prevailing rate of interest for similar instrument is 12%. The present value of an annuity of 12% for four periods is 3.605. Action Company incurred transaction costs amounting to P45,000 for the property. What is the cost of acquiring the property?
- On July 1, 2020, Marin Inc. made two sales: 1. It sold excess land in exchange for a four-year, non–interest-bearing promissory note in the face amount of $1,165,880. The land’s carrying value is $640,000. 2. It rendered services in exchange for an eight-year promissory note having a face value of $480,000. Interest at a rate of 2% is payable annually. The customers in the above transactions have credit ratings that require them to borrow money at 11% interest. Marin recently had to pay 7% interest for money it borrowed from British Bank. 3. On July 1, 2020, Marin also agreed to accept an instalment note from one of its customers in partial settlement of accounts receivable that were overdue. The note calls for four equal payments of $21,000, including the principal and interest due, on the anniversary of the note. The implied interest rate on this note is 9%. Required: 1. Prepare the journal entries to record the three notes receivable transactions of Marin…At the beginning of current year, Goldilocks Inc. signed an agreement to operate as a franchise of Cafe for an initial franchise fee of P1,000,000.Goldilocks Inc. paid P400,000 down and agreed to pay the balance in three equal annual payments of 200,000 at the end of each year. Goldilocks Inc. can borrow at 10% for a loan of this type. What is the acquisition cost of the franchise?American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 Reg 13 and 4 Prepare an amortization schedule for the…
- American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.5 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 X Answer is not complete. Req 1 3 and 4At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a fouryear, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installmentsof $2 million at the end of each year.Required:1. What is the effective rate of interest implicit in the agreement?2. Prepare the journal entry to record the purchase of the machine.3. Prepare the journal entry to record the first installment payment at December 31, 2018.4. Prepare the journal entry to record the second installment payment at December 31, 2019.5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interestfor notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.At the beginning of 2016, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a fouryear, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installments of $2 million at the end of each year. Required: 1. What is the effective rate of interest implicit in the agreement? 2. Prepare the journal entry to record the purchase of the machine. 3. Prepare the journal entry to record the first installment payment at December 31, 2016. 4. Prepare the journal entry to record the second installment payment at December 31, 2017. 5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.
- Samos, Inc. purchased certain plant assets under a deferred payment contract. The agreement was to pay $75,000 at year-end for each of the next three years. The plant assets should be valued at present value of a $75,000 annuity for three years discounted at the market interest rate. present value of a $75,000 annuity for three years discounted at the bank prime interest rate. $225,000. $225,000 plus imputed interest.xyz company purchased an equipment for $15,000 cash and signed a note for 5 equal payments of $10,000 at the end of each year for 5 years. The implied interest rate is 6%. At the time of acquisition, what amount would the equipment be recorded at?DAYTO Corporation owned a tract of land costing P800,000 which it sold for P1,000,000. The entity received a 3-year note for P1,000,000 plus interest of 12% compounded annually for the transaction. a. What is the amount of notes receivable to be recognized at the date of sale? b. What is the total amount of interest income recognized for the three year period?