Question No. 16 MC16 At the beginning of the current year, Zafril Company acquiredan investment property for P48 million. In the acquisition,Zafril made a 30% down payment and issued a 5-year, non-interest-bearing note for the remainder. The equal amount ofP6,720,000 is payable at the end of each year. The prevailingmarket rate of interest for similar instrument is 12%. Tocomplete the transaction, Zafril Company paid transactioncosts amounting to P500,000. Round off present value factorsto three decimal places.What is the correct cost of the investment property atacquisition date?P48,000,000P39,125,600P38,625,600P24,225,600а.b.C.d.

The cost of the investment property would be the present value of annual payments and down payment…

cürrent year, Zafril Company acquire an investment property for P48 million. In the acquisitio: Zafril made a 30% down payment and isued a 5-year, non interest-bearing note for the remainder. The equal amount P6,720,000 is payable at the end of each year. The prevailir market rate of interest for similar instrument is 12%. T complete the transaction, Zafril Company paid transactio costs amounting to P500,000. Round off present value factor to three decimal places. What is the correct cost of the investment property a acquisition date?

cürrent year, Zafril Company acquire an investment property for P48 million. In the acquisitio: Zafril made a 30% down payment and isued a 5-year, non interest-bearing note for the remainder. The equal amount P6,720,000 is payable at the end of each year. The prevailir market rate of interest for similar instrument is 12%. T complete the transaction, Zafril Company paid transactio costs amounting to P500,000. Round off present value factor to three decimal places. What is the correct cost of the investment property a acquisition date?

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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