NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of NOREEN on January 1,2019? A. 1,500,000 B. 1,815,000 C. 3,000,000 D. 3,630,000 Using the information above, what is the interest expense for 2019? 2. A. None B. 300,000 D. 630,000 How much should NOREEN INC record interest and retirement of its liability to MENDOZA INC on December 31, 2020? 3. C. 330,000; 3,630,000 D. 630,000; 3,630,000 A. None B. 300,000; 3,600,000

NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of NOREEN on January 1,2019? A. 1,500,000 B. 1,815,000 C. 3,000,000 D. 3,630,000 Using the information above, what is the interest expense for 2019? 2. A. None B. 300,000 D. 630,000 How much should NOREEN INC record interest and retirement of its liability to MENDOZA INC on December 31, 2020? 3. C. 330,000; 3,630,000 D. 630,000; 3,630,000 A. None B. 300,000; 3,600,000

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 40P

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