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Daisy incorporated sells equipment on installment basis aat 25% mark up on cost. Installment sales for the past four years were: 4,906,660 in 2018, 3,560,900 in 2019, 7,840,480 in 2020 and 8,960,690 on 2021. Terms of the sale are as follows; Down payment of 10%, 15% of the balance is collected in the year of sale, 20% a year after sale, 35% two years after the year of sale, and the remaining amountwill be collected three years after the year of sale. Determine the realized gross profit in 2021
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- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
- On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)Discounting of Notes Payable On October 30, 2019, Sanchez Company acquired a piece of machinery and signed a 12-month note for 24,000. The lace value of the note includes the price of the machinery and interest. The note is to be paid in four 6,000 quarterly installments. The value of the machinery is the present value of the four quarterly payments discounted at an annual interest rate of 16%. Required: 1. Prepare all the journal entries required to record the preceding information including the year-end adjusting entry and any payments. Present value techniques should be used. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
- On January 1, 2021, SPX Company sold an inventory costing P110,000 for P150,000. A 10% down payment was made and the balance payable in 4 equal installments of P33,750, payable semi-annually starting June 30 and December 31, 2021. The market rate of interest is 12%. (Round off present value factor to three decimal places). Selling expenses related with the installment sale is P5,000. How much is the significant financing component in the contract? A.40,000B.21,943,75C.18,056,25D.16,943,75Royal 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 2020On June 30, 2021, Casio Sony Company sold a property carried in inventory at a cost of 1,894,200 for P2,800,000. A 20% down payment was made and the balance payable in 8 equal installments of P280,000, payable quarterly starting September 30 and December 30, 2021. The market rate of interest is 12%. 1. How much is the total amount credited to Installment Sales? 2. How much is the total realized gross profit in 2021?
- Karl Industries purchased a machine from Koffee Corporation on October 1, 2020 gamma In payment for the S 450, 000 purchase, Karl issued a one year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. Monthly installment payments are:Gordon Company sold an equipment with a cost of P750,000 for an installment price of P1,000,000 on January 2, 2020. Gordon received 20% down payment and the balance will be paid in eight equal quarterly installment starting March 31, 2020. The market rate of interest is 10%. The customer defaulted on the payment of fourth quarterly installment which resulted to repossession of the equipment. Gordon anticipates selling price on reconditioned equipment of P400,000 after reconditioning it for P50,000. The gross profit for reconditioned equipment is expected to be 15% (Round off PV factor to 4 decimal places).How much is the Repossessed Item to be reported on December 31, 2020? how much is the Gain (Loss) on Repossession? how much is the Interest Revenue in 2020?A company purchases machinery for kshs 800,000 by making a down payment of Shs 150,000 and the remainder to be paid in equal instalments of kshs 150,000 for six years. Calculate the effective rate of interest
