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Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 2,215,063.00 1,500,000.00 65,063.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net inestment, end 1,776,558.00 2.215,063.00 1,500,.000.00 715,063.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 2,092,111.00 1,500,000.00 592111.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,377,058.00 592,111.00 161,505.00

Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 2,215,063.00 1,500,000.00 65,063.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net inestment, end 1,776,558.00 2.215,063.00 1,500,.000.00 715,063.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 2,092,111.00 1,500,000.00 592111.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,377,058.00 592,111.00 161,505.00

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter19: Lease Financing
Section: Chapter Questions
Problem 6P: Big Sky Mining Company must install 1.5 million of new machinery in its Nevada mine. It can obtain a...
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20. Pizzicato Co. a dealer, leases a brand-new machineto Prestissimo, Inc. The machine is classified as inventory in Pizzicato's books and has a carrying amount of P1,500,000. The usefullife of themachine is 5 years. The leaseterm is 4 years and the annual rent, due at the beginning of each year, is P600,000. Pizzicato Co. incurred direct cost O P20,000 in negotiatingthe lease. The market rate of interest is 10%. The machine reverts back to Pizzicato at the end of the leaseterm, at which timethe machine is expectedto have aresidual value of P180,000. Pizzicato accounts forthe lease sale typelease.
Transcribed Image Text:20. Pizzicato Co. a dealer, leases a brand-new machineto Prestissimo, Inc. The machine is classified as inventory in Pizzicato's books and has a carrying amount of P1,500,000. The usefullife of themachine is 5 years. The leaseterm is 4 years and the annual rent, due at the beginning of each year, is P600,000. Pizzicato Co. incurred direct cost O P20,000 in negotiatingthe lease. The market rate of interest is 10%. The machine reverts back to Pizzicato at the end of the leaseterm, at which timethe machine is expectedto have aresidual value of P180,000. Pizzicato accounts forthe lease sale typelease.
Sales Cost of Sales Net Selling profit Interest income Net investment, end 2,215,063.00 1,500,000.00 695,063.00 161,505.00 1,776,55&00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 715,063.00 2,215,063.00 1,500,000.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,500,000.00 592,111.00 161,505.00 d. Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,377,068.00 592,111.00 161,5C5.00
Transcribed Image Text:Sales Cost of Sales Net Selling profit Interest income Net investment, end 2,215,063.00 1,500,000.00 695,063.00 161,505.00 1,776,55&00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,558.00 715,063.00 2,215,063.00 1,500,000.00 161,505.00 Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,500,000.00 592,111.00 161,505.00 d. Sales Cost of Sales Net Selling profit Interest income Net investment, end 1,776,55800 2,092,111.00 1,377,068.00 592,111.00 161,5C5.00
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