In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: A Balancing Charge of $3,700,000 A Balancing Allowance of $4,500,000 A Balancing allowance of $3,200,000 A Balancing Charge of $3,200,000
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- In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis.
The balancing adjustment is:
- A Balancing Charge of $3,700,000
- A Balancing Allowance of $4,500,000
- A Balancing allowance of $3,200,000
- A Balancing Charge of $3,200,000
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- In 2018 an asset was purchased for $2,000,000. Initial Allowance (I.A) Rate was 20%. Annual Allowance (A.A) Rate was 10%. The asset was sold in 2020 for $1,000,000. Capital allowance is on the reducing balance basis. The balancing adjustment is: a. $200,000 b. $260,000 c. $740,000 d. $134,000In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: a. $3,700,000 b. $4,500,000 c. $4,000,000 d. $3,200,000In 2018 an asset was purchased for $2,000,000. The asset qualified for Initial Allowance. The Initial Allowance (I.A) Rate was 20%. Annual Allowance (A.A) Rate was 10%. The asset was sold in 2020 for $1,000,000. Capital allowance is on the reducing balance basis. The balancing adjustment is: a.A Balancing Charge b.A Balancing Allowance
- In 2018 an asset was purchased for $2,000,000. Initial Allowance (I.A) Rate was 20%. Annual Allowance (A.A) Rate was 10%. The asset was sold in 2020 for $1,000,000. Capital allowance is on the reducing balance basis. The balancing adjustment is:On July 1, 2020, Marin Inc. made two sales: 1. It sold excess land in exchange for a four-year, non–interest-bearing promissory note in the face amount of $1,165,880. The land’s carrying value is $640,000. 2. It rendered services in exchange for an eight-year promissory note having a face value of $480,000. Interest at a rate of 2% is payable annually. The customers in the above transactions have credit ratings that require them to borrow money at 11% interest. Marin recently had to pay 7% interest for money it borrowed from British Bank. 3. On July 1, 2020, Marin also agreed to accept an instalment note from one of its customers in partial settlement of accounts receivable that were overdue. The note calls for four equal payments of $21,000, including the principal and interest due, on the anniversary of the note. The implied interest rate on this note is 9%. Required: 1. Prepare the journal entries to record the three notes receivable transactions of Marin…The Slow company has started the construction of an asset on September 1, 2019and finished it on November 1, 2020. The weighted average expenditure ascalculated at the end of the construction in 2020 was: $725,456. In 2020, thecomp had the following outstanding indirect debts:DebtOne-year loan payable taken out on March 31, 2019Two-year note payable Faken out on June 1, 2020Amount$67,000$120,000Annual rate5%7%Assuming there is no direct debt related to this construction, the interest that will becapitalized on indirect debt in 2020 is (calculate ratios to 2 decimal places):a) $47,980b) $45,130Oc) $7,133d) $5,737
- On April 1, 2022 Blo Inc. receives a 6-year $60,000 note in exchange for a parcel of land. The cost of the land was $35,000. Neither the market rate nor the fair value of the land can be determined. Notes of similar risk carry a 12% imputed rate of interest. The financial year ends December 31. a. The present value of the note is $Answer b. There was a (gain or loss) Answer on the sale of the land of $AnswerOn April 1, 2023 Blo Inc. receives a 6-year $60,000 note in exchange for a parcel of land. The cost of the land was $35,000. Neither the market rate nor the fair value of the land can be determined. Notes of similar risk carry a 12% imputed rate of interest. The financial year ends December 31. a. The present value of the note is $________ b. There was a (gain or loss) ___________on the sale of the land of $__________On December 31, 2020, an entity sold a piece of land costing P800, 000 and received a 3-year, 3%, P1, 200, 000 note as payment. The interest on the note is payable annually every December 31. The principal amount of the note is payable on December 31, 2023. The prevailing interest rate for similar obligation on December 31, 2020 is 10%. Assume that there is no available fair value for the land on the date of sale. Using four decimal places for the PV factor, which of the following is part of the possible entries that would appear up to the maturity of the note?a. credit Gain on sale of land, P400, 000b. debit Discount on Notes Receivable, P112, 383.c. debit Cash, P1, 236, 000d. credit Interest revenue, P76, 383
- Equipment with a cost of R500 000 is purchased and R200 000 is paid immediately on 1 January 2016. The balance will only be paid on 31 December 2016, which exceeds normal credit terms. An after-tax discount rate is 9% per annum. Assume a tax rate of 28%. Calculate the cost of the asset at initial recognition.On January 1, 2023, Hornets Company sold land that originally cost P400,000 to the Egi Company. As payment, Egi gave Hornets a P600,000 note. The note bears an interest rate of 8% and is to be repaid in three annual installments of P200,000 plus interest on the outstanding balance. The first payment is due on December 31, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:31. How much is the interest revenue for the year 2023? A. P67,217B. P57,643C. P51,250D. P48,000On January 1, 2023, Hornets Company sold land that originally cost P400,000 to the Egi Company. As payment, Egi gave Hornets a P600,000 note. The note bears an interest rate of 8% and is to be repaid in three annual installments of P200,000 plus interest on the outstanding balance. The first payment is due on December 31, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:32. Using the assumption of No. 30 (which is 12% interest rate for notes instead of 8%), what is the amortized cost of the note receivable at December 31, 2023? A. P600,000B. P400,000C. P379,355D. P290,003