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
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- Cassandra Company decides to enter the leasing business. The entity acquires a specialized packaging machine for P3,000,000 cash and leases it for a period of 6 years after which the machine is to be returned to Cassandra Company for disposition. The guaranteed residual value of the machine is P200,000. The lease term is arranged so that a return of 12% is earned by Cassandra Company. 1. What is the annual rental payable in advance required to yield the desired return?Pizzicato Co. a dealer, leases a brand-new machine to Prestissimo, Inc. The machine is classified as inventory in Pizzicato’s books and has a carrying amount of P1,500,000. The useful life of the machine is 5 years. The lease term 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 negotiating the lease. The market rate of interest is 10%. The machine reverts back to Pizzicato at the end of the lease term, at which time the machine is expected to have a residual value of P180,000. Pizzicato accounts for the lease sale type lease. What amounts for the following should Pizzicato Co. report in Year 1 of the lease assuming the residual value is guaranteed? a Sales Cost of Sales Net Selling profit Interest income Net investment, end 2,215,053.00 1,500,000.00 695,053.00 161,505.00 1,776,558.00 a , Sales Cost of Sales Net Selling profit Interest…Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000
- 11. What amount of gross income should be recognized by the entity for 2020? a. P555,000 b. P827,000 c. P955,000 d. P700,000 12. What amount should be recognized as interest income for 2020? a. P194,160 b. P154,160 c. P172,400 d. P128,000At the beginning of current year, Arianne Company sold a Próblem 15-12 (IFRS) machine and immediately leased it back. 5,000,000 6,000,000 500,000 Sale price at fair value Carrying amount of machine Annual rental payable at the end of each year Lease term Remaining life of machine Implicit interest rate PV of an ordinary annuity of 1 at 6% for 5 perioda 5 years 20 years 6% 4.21 1. What is the cost of right of use asset? a. 2,105,000 b. 2,526,000 c. 2,895,000 d. 1,500,000 2. What is the loss on right transferred to the buyer-lessor? a. 579,000 b. 505,200 c. 500,000 d. 3. What is the lease liability at year-end? a. 2,177,560 b. 1,605,000 с. 1,731,300 d. 2,105,000 4. What is the net annual rental income of the buyer-lessor? a. 373,700 b. 200,000 с. 500,000 d. 250,000 17 I 10 Page +At the beginning of current year, Waxxy Company sold a machine and immediately leased back. The following data relate to the sale and leaseback transaction: Sale price at above fair value 6,000,000 Fair value of machine 5,000,000 Carrying amount of machine 4,500,000 Annual rental payable at the end of each year 800,000 Remaining life of machine 10 years Lease term 4 years Implicit interest rate 8% Present value of an ordinary annuity of 1 at 8% for four periods 3.312 There is no transfer of title to the lessee nor…
- Macinski Leasing leases a new machine to Sharrer SA. The machine has a cost of €70,000 and fair value of €95,000. Under the 3-year, non- cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2019. Macinski expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentalsare payable on each December 31, beginning December 31, 2019.Instructions1. Prepare the journal entry at commencement of the lease for Macinski.2. Prepare the journal entry at commencement of the lease for Sharrer.3. Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Macinski's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial directs costs of €10,000.machine and immediately leased it back at market rental. The details of the sale and leaseback are: Annual rental payable at the end of each year At the beginning of current year, Juan Company sold a Problem 15-3 (IFRS) the beginning of current year, Juan Company sold a Sale price at fair value Fair value of machine Carrying amount of machine 5,000,000 5,000,000 4,500,000 600,000 10 years 5 years 10% Remaining life of machine Lease term Implicit interest rate Present value of an ordinary annuity of 1 at 10% for five periods 3.791 The leaseback provides for neither transfer of title to the lessee nor a purchase option that is reasonably certain to be exercised. Required: 1. Compute the initial measurement of lease liability. 2. Compute the cost of right of úse asset. 3. Determine the gain on right to transferred to the buyer-lessor. 4. Prepare journal entries on the books of seller-lessee for the current year. . Prepare journal entries on the books of buyer-lessor for the current year.16. On January 1, 2020, Roque Company purchased a new machine for P6,000,000 for the purpose of leasing it. Themachine had an estimated 10-year life. On April 1, 2020, the Roque leased the machine to a lessee for threeyears at a monthly rental of P400,000. The lessee paid the rental for one year of P4,800,000 on April 2020 andadditionally paid P600,000 to the lessor as a lease bonus to obtain the three-year lease. On April 1, 2020, Roquepaid P100,000 to a broker as a finder fee.What is the net rental income of Roque Company for 2020?
- Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following information: Annual rental payable at beginning of each lease year P 400,000; Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Present Value of an annuity of 1 advance for 10 periods at 10 periods at 14%. 0.27 Myro has the option to purchase the machine on May 1, 2024, by paying P 500,000, which approximate the expected fair value of the machine on the option exercise date. On May 1, 2014, how much should Myro record the leased asset?APPLE Company leased a manufacturing machine from 123 Company on 1/1/2020 for 10 years. The lease terms are as follows: a. 123 assumes 10% interest b. First rent is payable on 1/1/2020 and on 12/31 the remaining life of the lease c. Estimated economic life of the aircraft is 10 years. d. Cost of the aircraft to 123 is $500,000. e. 123 wants to recover its investment and earns A. What type of lease is this for APPLE and 123? B. Calculate the annual rent. C. Make journal entries by both APPLE and 123 for the first year (1/1/20 to 12/31/2AB leases 100 desk phones for use in one of its offices. The contract term states that there will be an annual rental payment of R9 000 for eight years. The lease arrangement begins on 1 July 20x0. As an incentive to AB, no payment is required in the first year. The desk phones are to be classified as low-value items.Prepare the correct debit or credit entry that would be required in Entity AB’s income statement for the year ended 30 June 20x1 in respect of the above transaction.