On January 1, 2023, GADI Inc. sold a large piece of equipment to a client for $1,363,000. Rather than pay cash, the client issued a 4 year, zero-interest bearing promisory note with a face value of $1,475,400 (an implicit interest rate of 2%). The equipment originally cost $818,000 to produce. What amount of gross profit should GADI Inc. recognize for this sale on its 2023 income statement? (10 16) $545,000 O $1,475,400 O $1,363,000 $657,400
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- . On January 1, 2020, Lombard Co. sells property for which it had paid $690,000 to Sargent Company, receiving in return Sargent’s zero-interest-bearing note for $1,000,000 payable in 5 years. What entry would Lombard make to record the sale, assuming that Lombard frequently sells similar items of property for a cash sales price of $640,000?On January 1, 2025, Oriole Co. sells land for which it had paid $707,400 to Sargent Company, receiving in return Sargent's zero- interest-bearing note for $1,000,000 payable in 5 years. What entry would Oriole make to record the sale, assuming that Oriole frequently sells similar items of land for a cash sales price of $651,000? (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1 Notes Receivable Discount on Notes Receivable Debit CreditOn January 1, 2025, Splish Co. sells land for which it had paid $705,700 to Sargent Company, receiving in return Sargent's zero- interest-bearing note for $900,000 payable in 5 years. What entry would Splish make to record the sale, assuming that Splish frequently sells similar items of land for a cash sales price of $650,000? (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries) Date Account Titles and Explanation Jan. 1 Debit Credit
- On January 1, 2019, Mar Co. sold a piece of equipment acquired ten years ago for P35,000. At the time of sale, the equipment had an accumulated depreciation of P24,000. Mar received a non-interest-bearing note for P30,000 in exchange for the equipment. The note is due on January 1, 2021. There is no readily available market value for the equipment, but the current market rate of interest for comparable notes is 12%. Present Value of single payment is at 12% for 2 periods is 0.7972 while Present Value of ordinary annuity is at12% for 2 periods is 1.6901 How much is the gain on sale of equipment in 2019 and the interest revenue in 2020, respectively?On January 1, 2017, Lombard Co. sells property forwhich it had paid $690,000 to Sargent Company, receivingin return Sargent’s zero-interest-bearing note for$1,000,000 payable in 5 years. What entry would Lombardmake to record the sale, assuming that Lombardfrequently sells similar items of property for a cash salesprice of $640,000?On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Current portion of the notes receivable 2. Non current portion of the notes receivable
- On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Gain or loss on sale of machinery (place parenthesis if loss) 2. Interest incomeOn July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated depreciation of P380,000 on the date of sale. LIBAGO received as consideration for the sale, a P300,000 non-interest bearing note, due July 1, 2024. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2021 was 12% and 13% on December 31, 2021. 37. In relation to this transaction, the total income to be recognized in LIBAGO’s 2021 profit or loss is:On June 30, 2018, Kimberly Farms purchased custom-made harvesting equipment from a local producer. In payment, Kimberly signed a noninterest-bearing note requiring the payment of $60,000 in two years. The fair valueof the equipment is not known, but an 8% interest rate properly reflects the time value of money for this type ofloan agreement. At what amount will Kimberly initially value the equipment? How much interest expense willKimberly recognize in its income statement for this note for the year ended December 31, 2018?
- On July 1, 2019, Optimistic Company sold a machine costing P500,000 with accumulated depreciation of P380,000. On the date of sale, Optimistic received as consideration for the sale, a P300,000 noninterest-bearing note, due July 1, 2022. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2019 was 12% and 13% on December 31, 2019. In relation to this transaction, what is the total income to be recognized in Optimistic’s 2019 statement of comprehensive income? (Round PVF to 4 decimals) P119,165 P180,000 P101,445 P106,3521. On November 4, 2020, GT Corporation sells a piece of its equipment. GT Corporation had initially purchased the equipment for $350,000. The company had recorded $230,000 in depreciation for this piece of equipment as of the date of sale. If GT Corporation receive $150,000 cash when they sell the equipment, they will report a November 2020 Income Statement; if they instead receive $100,000 cash when they sell the equipment, they will on their report a a. $150,000 gain; $100,000 gain. b. $80,000 gain; $130,000 loss. c. $30,000 loss; $20,000 gain. d. $30,000 gain; $20,000 loss.On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a P2,400,000 Zero-interest-bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2022. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. The note will be reported on Dansko’s 2022 statement of financial position at a carrying value of P2,400,000 P2,188,560 P2,126,400 P1,388,560