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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.Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,000. Prior to the machine’s use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?In January, Hunter Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows: Down payment .......................................... P 30,000 Note payable in 10 equal monthly installments ......... 240,000 1,000 shares of Hunter common stock with an agreed value of P50 per share .............................. 50,000 Total ................................................. P320,000 Your audit disclosed that prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of P10,000. As auditor of the corporation, what should Hunter record as depreciation expense for the first year under the straight-line method? Select one: a. P30,000 b. P31,000 c. P29,800 d. P31,800
- ABC Corp entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: Down payment P 400,000 Note payable in 3 equal annual installments 1,200,000 20,000 shares of ABC, fair value of P40 per share 800,000 TOTAL 2,400,000 Prior to the machine’s use, installation cost of P50,000 was incurred. The machine has a residual value of P100,000. required: What is the cost of the machine for financial reporting purposes?On January 1, 2020, Banana Co. entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P300,000, was paid for as follows: Down payment P30,000; Note payable in 10 equal monthly installments P240,000; 1,000 shares of Banana Co. ordinary shares with an agreed value of P50 per share: P50,000 Total P320,000. Prior to the machine's use, installation costs of P8,000 were incurred. The machine has an estimated useful life of 10 years and salvage value of P10,000. What should the company record as depreciation expense for the first year under the straight line method?On January 1, 2020, Ferdie Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of P295,000, was paid for as follows: Down payment P80,000 6% Notes payable (payable in four equal annual payments starting December 31, 2020) 200,000 500 ordinary shares of Gemrey Co. P100 par with a market value of P110. 50,000 At what amount should Ferdie initially measure its machine?
- On January 1, 2020, ABC Co. entered into a contract to acquire a newmachine for its factory. The machine, which had a cash price of $300,000,was paid for as follows: Down payment $30,000; Note payable in 10 equalmonthly installments $240,000; 1,000 shares of Banana Co. ordinaryshares with an agreed value of $50 per share: $50,000 Total $320,000.Prior to the machine's use, installation costs of $8,000 were incurred. Themachine has an estimated useful life of 10 years and salvage value of$10,000. What should the company record as depreciation expense forthe first year under the straight line method?In January 2022, Utah Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000, was paid for as follows: Down payment 300,0005,000 ordinary shares of Utah with an agreed-upon value of P370 per share 1,850,0002,150,000Prior to the machine’s use, installation costs of P70,000 were incurred. The machine has an estimated useful life of 10 years and an estimated salvage value of P100,000. The straight line method of depreciation is used. The depreciation to be recognized in 2022 isTourmalet sold an item of plant for $50 million on 1 April 20X4. The plant had a carrying amount of $40 million at the date of sale, which was charged to cost of sales. On the same date, Tourmalet entered into an agreement to lease back the plant for the next five years (being the estimated remaining life of the plant) at a cost of $14 million per annum payable annually in arrears. An arrangement of this type is normally deemed to have a financing cost of 10% per annum. What amount will be shown as income from this transaction in the statement of profit or loss for the year ended 30 September 20X4?
- Mean Dones and Jeremie Jane Roldan Inc. charges an initial franchise fee of P920,00, with P200,000paid when the agreement is signed and the balance in five annual payments. The present value ofthe future payments, discounted at 10%, is P545,872. The franchise has the option to purchaseP120.000 of equipment for P96,000, franchise operations already stared. The amount of revenuefrom franchise fees is:-P200.000-P721.872-P745,872-P920,000GHI Corporation entered into a 20 year franchise that allows ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total dost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. What is the Continuing franchise revenue for the first year?GHI Corporation entered into a 20 year franchise that allows ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total dost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. What is the Interest revenue for the first year?
