On January 1, 2021, Grace Corp. created a special building fund by depositing a single sum of P300,000 with aTrust Company. The purpose of the fund is to provide resources to build another wing of a building that is expectedto be completed by the end of 2025. The company estimates a total expenditure of P1.5 million and completionby January 1, 2026.Grace Corp. plans to make annual deposit from December 31, 2021 to 2025 to accumulate the required P1.5million. The Trust Company will increase the fund each December 31 at an interest rate of 8%. Both the accountingperiod of the company and the fund end on December 31.Based on the above and the result of your audit, answer the following (Round off present and future valuefactors to four decimal places and final answer to the nearest peso):1. How much is the annual deposit to the fund?2. How much is the fund balance as of December 31, 2021?

Balance at the end which is required at the end of the specified period, the investor or company…

Answered: 1. How much is the annual deposit to…

Business

Accounting

1. How much is the annual deposit to the fund? 2. How much is the fund balance as of December 31, 2021?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 40P

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The city of Sandwhich purchased a swimming pool from a private operator as of April 1, 2020 for $400,000, of which $200,000 was provided by a one-time contribution from the General Fund, and $200,000was provided by a loan from the First National Bank, secured by a note. The loan has an annual interest rate of 6 percent, payable semiannually on October 1 and April 1; principal payments of $100,000are to be made annually, begining on April 1, 2021. The city has a calander year as its fiscal year. During the year ended December 31, 2020, the following transactions occured related to the City of Sandwhich Swimming Pool. 1. The amounts were received from the City General Fund and the Fist National Bank. 2. A loan was provided in the amount of $125,000 from the Water Utility Fund to provide the working capital. 3. The purchase of the pool was recorded. Based on the appraisal, it was decided to allocate $100,000 to the land, $200,000 to imporvements other then buildings ( the pool), and…
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On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $25,000 each, and will be paid on December 31, 2021, 2022, and 2023. The last three are to be $40,000 each and will be paid on December 31, 2024, 2025, and 2026. Montgomery borrowed other money at a 10% annual rate.Required:1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2021?2. How much interest expense on this note will Montgomery recognize in 2021?
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