As of June 30, 2023, Alpha Ltd disclosed the followingdetails regarding its assets and liabilities from itsbalance sheet:Assets ($000):Computer equipment at purchase price: 300Accumulated depreciation: (60)Accounts receivable: 100Allowance for doubtful accounts: (10)Liabilities:Warranty cost provision: 30Provision for long service leave benefits: 20Alpha Ltd depreciates its computer equipment over fiveyears for accounting purposes but over three years fortax purposes, using the straight-line depreciationmethod. No payments were made for long service leaveor warranty claims during the fiscal year.Determine the value of each temporary difference forAlpha Ltd as of June 30, 2023. Calculate the carryingamount and tax base, and specify whether eachtemporary difference is deductible or taxable.

Temporary Differences for Alpha Ltd (as of June 30, 2023)1. Depreciation on Computer…

Answered: As of June 30, 2023, Alpha Ltd…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2020, Allure Company sold an equipment with a carrying amount of P800,00, receiving a noninterest bearing note due in three years with a face amount of P1,000,000. There os no established market value for the equipment. The interest rate on similar obligations is 12%. The present value of 1 at 12% for three periods is .712. 1. What amount should be reported as gain or loss on the sale of equipment in 2020? a. 200,000 gain b. 200,000 loss c. 88,00 gain d. 88,00 loss 2. What amount should be reported as interest income for 2020? a. 288,000 b. 120,000 c. 96,000 d. 85,440 3. What is the carrying amount of note receivable on December 31, 2020? a. 559,600 b. 712,000 c. 797,440 d. 800,000 4. What amount should be reported as interest income for 2021? a. 95,693 b. 96,000 c. 75,000 d. 60,000
Lathrop Inc. purchased equipment on January 1, 2020, for $30,000 cash plus a note payable. The fair value of the equipment on January 1, 2020, is $108,533. The market rate of interest is 6%. 5M Corp. uses the effective interest method to amortize discounts and premiums. Record the entries over the term of the note payable for the following three separate scenarios for the structuring of the note payable. a. The principal of $80,000 is due on December 31, 2021, and the note specified 5% interest payable each December 31 over a two-year period. b. The face value of the note payable is instead $88,240 and is due on December 31, 2021. The note is structured as a zero-interest-bearing note payable over a two-year period. c. The loan is extended to three years with equal payments of $29,380 due on each December 31 over the term of the note. The note will be fully paid upon maturity. Case One Case Two Case Three Note: Round your answers to the nearest whole dollar. • Note: Include any net…
ABEL company’s statement of profit or loss for the year ended 31 December 2019 showed a net profit of Shs83,600,000. It was later found that Shs18,000,000 paid for the purchase of a motor van had been debited to the motor expenses account. It is the company’s policy to depreciate motor vans at 25% per year on the straight line basis, with a full year’s charge in the year of acquisition. Compute the correct net profit figure in ABEL Co. ltd . (Show your workings)
DEF Company had acquired the following assets: Purchased Equipment on January 1, 2022 with a list price of P1,500,000 and was acquired with the following terms: Trade discount of 10%; Offered cash discount of 2% (which DEF did not take). o 0 -Purchased Machinery on January 1, 2022 under the following terms: Down payment of P150,000; 0 O Issued a non-interest bearing note payable in annual installments of P105,000 starting December 31, 2022. Total face value of the note was P420,000. The cash price equivalent for the machinery was not available. The incremental borrowing rate of DEF was 8%. PVF of P1 ordinary annuity for 4 periods was 3.31. A building was donated by a wealthy shareholder of DEF Company. At the time of donation, the fair value of the building was P15,000,000. DEF incurred necessary costs amounting to P150,000 in relation to the donated building. The cost of the building to the wealthy shareholder was P10,000,000. 0 REQUIREMENTS: What is the initial cost of the equipment?…
On January 1, 2021, More Co. received a 3-year, noninterest bearing note of P900,000 in exchange for machinery with historical cost of P1,000,000 and accumulated depreciation of P200,000. The note is due on December 31, 2023. The effective interest rate is 12%. The present value of 1 at 12% for 3 periods is 0.7118.Requirements: 1. Prepare the amortization table. 2. Provide all the necessary journal entries.
On January 1,2021, Mickey Mouse Corp sells a Furniture and Fixtures costing P1,200,000 and with accumulated depreciation of P550,000 as of January 1,2021. The company receives 5-year, P500,000, 12% note. The stated interest in unrealistic since the prevailing rate of interest for a note of this type is 14%. How much is the interest income to be recognized in December 31, 2022? 65,196 65,923 66,753 67,698
On December 31, 2021, Purple Company sold a building, receiving as a consideration a P4,000,000 non-interest bearing note due in three years. The building costs P3,800,000 and the accumulated depreciation was P1,600,000 at the date of sale. The prevailing rate of interest for a note of this type was 12%. How much gain or loss should Purple report on the sale of the asset? O 647.121 gain O 1,800,000 gain O 988.776 gain O 988.776 loss
On january 1, 2020, allure company sold an equipment with a carrying amout of 800,000, receiving a noninterest bearing note due in 3 years with a face amount of 1,000,000. There is no established market value for an equipment. The interest rate on similar obligation is 12%. The present value of 1 at 12% for three periods is 0.712. What amount should be reported as gain or loss on the sale of equipment in 2020?
On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated depreciation of P1,800,000. In consideration for the sale, Sana Madali Lang Company received cash of P100,000 and a P3,000,000 non-interest-bearing note due on December 31, 2021. The prevailing interest rate for a note of this type is 10%. (The PVF of 1 at 10% for 4 years is 0.6830 while the PVF of ordinary annuity at 10% for 4 years is 3.1699) How much is the carrying amount of the note on initial recognition? а. Р3.000,000 b. P5,000,000 c. P2,049,000 1. d. P2,117,300 е. Р9,509,700 How much is the loss on sale of machinery? a. P1,051,000 b. P1,082,700 c. P1,151,000 2. d. P982,700 e. P2,851,000 3. How much is the interest income for 2019? а. Р225,390 b. P204,900 c. P211,730 d. P232,903 е. Р300,000 4. How much is the carrying amount of the note on December 31, 2019? а. Р2,329,030 b. P2,401,831 c. P2,561,933 d. P2,253,900 e. P2,479,290
On December 31, 2021, Purple Company sold a building, receiving as a consideration a P4,000,000 non-interest bearing note due in three years. The building costs P3,800,000 and the accumulated depreciation was P1,600,000 at the date of sale. The prevailing rate of interest for a note of this type was 12%. How much gain or loss should Purple report on the sale of the asset?
On January 1, 2023, ABC Company sold a office equipment with a cost of P5,400,000 and accumulated depreciation of P2,980,000. In consideration for the sale, ABC Company received cash of P220,000 and a noninterest-bearing note receivable of P3,500,000 due on December 31, 2026. The prevailing rate of interest for this type of note is 12%. On January 1, 2023, ABC Company sold an old machinery with a cost of P3,000,000 and accumulated depreciation of P2,000,000. In consideration for the sale, ABC Company received cash of P250,000 and a noninterest-bearing note receivable of P1,850,000 due in 5 equal annual installments starting December 31, 2023. The prevailing rate of interest of this type of note is 10%. 1. The total gain or loss on sale of office equipment and old machinery is A. Nil B. 600,000 C. 652,591 D. 676,904 2. The interest income to be recognized in 2023 is A. Nil B. 266,918 C. 407,177 D. 605,000 3. The carrying amount of the note as of December 31, 2023 is A. 3,256,904 B.…
On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated depreciation of P1,800,000. In consideration for the sale, Sana Madali Lang Company received cash of P100,000 and a P3,000,000 non-interest-bearing note due on December 31, 2021. The prevailing interest rate for a note of this type is 10%. (The PVF of 1 at 10% for 4 years is 0.6830 while the PVF of ordinary annuity at 10% for 4 years is 3.1699) 4. How much is the carrying amount of the note on December 31, 2019? a. P2,329,030 b. P2,401,831 c. P2,561,933 d. P2,253,900 e. P2,479,290

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS