2 During the early part of current year, the estissuance was 10%. The present value of an ordinaysubect to a canh dinoount of 10%% which was not taknThe entity ineurred cont of P60,000 in removing themachine for P2,000,000 in exchange for a noninteneI. Aoquired a machine with an invoice price of Pa00first payment was made at the end of current year.machine prior to the installation of the new one. Mahinpurchased a machine for P500,000 down and four mont3. At the beginning of current year, the entity purchaseinstaliments of P1.250,000. The cash price of the machiThe implicit rate of interest for this note at datebearing note requiring four payments of P500,000. TProblem 23-4 IAA)ProblemNuttypurchaduring the year:Land anMachineDeliversAn apsupplies were acquired at a cost of P150,00LandBuildinMachirభDelivewas P4,700,0002 Nuttythe foLandBuildiMachiTheexchaof puannuity of I at 10% is 3.17 for four periods.The present value of an annuity of 1 in advance at 103.49 for four periods.3. Recephilacity4 At the beginning of current year, the entity acquiredmachine by issuing a four-year, noninterest-bearing ntfor P2,000,000.4. ThecashThe entity has an implicit 10% interest for the type dnote. The present value of 1 at 10% for 4 years is 0.685. TheP40tranRequired:ThePrepare journal entries to record the machinery acquisituliaand related interest.preRequiPrepar652

Solution: Introduction: Journal entry is an accounting entry to record every transaction takes place…

Problem 23 Anson Company had the fisflowing machinery a Pro Nutty purcha Land ar Machir Deliver during the ywar I Aeguired a machine with an invoice price of PS ueet tea cash discount of 10% which was not tak The entity incurred cont of P60,000 in removing the upplies were acquired at a cost of PI50,000, achine prior to the installation of the new one. Mac An ap 2 During the early part of eurrent year, the e purchased a machine for P500,000 down and four wont installmente of PL.250,000. The cash price of the mach Land Buildir Machin Office Delive wa P4, 700,000. 3. At the beginning of current year, the entity purchase machine for P2,000,000 in exchange for a noninte bearing note requiring four payments of P500,000. T first payment was made at the end of current year. 2 Nutty the fo Land Builda Mach The implicit rate of interest for this note at date d issuance was 10%. The present value of an ordiney annuity of 1 at 10% is 3.17 for four periods, The exch of pu The present value of an annuity of 1 in advance 3. Rece

Problem 23 Anson Company had the fisflowing machinery a Pro Nutty purcha Land ar Machir Deliver during the ywar I Aeguired a machine with an invoice price of PS ueet tea cash discount of 10% which was not tak The entity incurred cont of P60,000 in removing the upplies were acquired at a cost of PI50,000, achine prior to the installation of the new one. Mac An ap 2 During the early part of eurrent year, the e purchased a machine for P500,000 down and four wont installmente of PL.250,000. The cash price of the mach Land Buildir Machin Office Delive wa P4, 700,000. 3. At the beginning of current year, the entity purchase machine for P2,000,000 in exchange for a noninte bearing note requiring four payments of P500,000. T first payment was made at the end of current year. 2 Nutty the fo Land Builda Mach The implicit rate of interest for this note at date d issuance was 10%. The present value of an ordiney annuity of 1 at 10% is 3.17 for four periods, The exch of pu The present value of an annuity of 1 in advance 3. Rece

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On Jan, 1, 20X1 ABC Corp sold equipment with a cost of P20,000,000 and accumulated depreciation of P9,000,000 in exchange for cash of P500,000 and non-interest bearing note receivable of P8,000,000 due in 4 equal annual installments starting on Dec 31, 20X1. Effective rate was 12% for this type of note. PV of P1 at 12% for 4n = .63552 PV of ordinary annuity of P1 at 12% for 4n = 3.03735 How much is the gain or loss on sale of the equipment? 3,000,000 4,425,300 4,925,300 5,415,840
On Jan, 1, 20X1 ABC Corp sold equipment with a cost of P20,000,000 and accumulated depreciation of P9,000,000 in exchange for cash of P500,000 and non-interest bearing note receivable of P8,000,000 due in 4 equal annual installments starting on Dec 31, 20X1. Effective rate was 12% for this type of note. PV of P1 at 12% for 4n = .63552 PV of ordinary annuity of P1 at 12% for 4n = 3.03735 How much is the gain or loss on sale of the equipment? a.3000 b. 4,425,300 c. 4,925,300 d. 4,925,300
On June 30, 2021, ABC Corp. purchased a P3,000,000 face valuebonds with P2,925,067.05 cash. The interest rate is 10%, payablesemiannually every June 30 and Dec. 31. The remaining term as ofacquisition date is three years. ABC purchased it for bothcontractual cashflows and trading purpose, and hence initiallydesignated it as FA‐FV‐OCI. The effective interest rate is 11%. Withinthe year 2022, there was a change in the purpose of holding theinvestment to maturity. As of the end of the years 2022 and 2023,the bonds were valued at P2,950,000 and P2,975,000 respectively.1. What is the compound journal entry to record thereclassification and update the related accounts? Includethe date and explanation.
On June 30, 2021, ABC Corp. purchased a P3,000,000 face valuebonds with P2,925,067.05 cash. The interest rate is 10%, payablesemiannually every June 30 and Dec. 31. The remaining term as ofacquisition date is three years. ABC purchased it for bothcontractual cashflows and trading purpose, and hence initiallydesignated it as FA‐FV‐OCI. The effective interest rate is 11%. Withinthe year 2022, there was a change in the purpose of holding theinvestment to maturity. As of the end of the years 2022 and 2023,the bonds were valued at P2,950,000 and P2,975,000 respectively. What is the compound journal entry to record thereclassification and update the related accounts? Includethe date and explanation.
. A 90-day government bill was bought by an investor for a price of K95 per K100 nom- inal. After 30 days the investor sold the bill to a second investor for K97.50 per K100 nominal. The second investor held the bill to maturity when it was redeemed at par. Determine which investor obtained the higher annual effective rate of return.
Calculate all the 3subparts A,B,C.if answered within 40mins,it would be appreciable!! A) Calculate the book values of both the swap account and the note in each of the three years.B) Calculate the net effect on earnings of the hedging arrangement in each of the three years. (Ignore income taxes.)C) Suppose the fair value of the note at December 31, 2021, had been $267,000 rather than $276,441 with the additional decline in fair value due to investors’ perceptions that the creditworthiness of Labtech was worsening. How would that affect your entries to record changes in the fair values?
Suppose that a party wanted to enter an FRA that expires in 121 days and is based on 55-day LIBOR. The dealer quotes a rate of 0.049 on the FRA. Assume that at expiration, the 55-day LIBOR is 0.029, and the notional amount is USD10,000,000. What is the payoff of the FRA short position?
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On January 1, 2012, Enrich Company purchased a machine under the following terms:a. 100,000 downpaymentb. four annual payments of P200, 000, the first installment to be paid on December 31,2012The fair value of the machine is not clearly determinable on the date of acquisition.The prevailing rate of interest for this type of obligation is 10%. The present value factors at 10%for four periods are:Present value of 1 .683Present value of ordinary annuity of 1 3.170Required: How much is the cost of the machine_________________
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