problem 5 and 6

Problem 5: Dyane Company is in the business of telecommunication. It is given a concession by the government to operate the business for 10 years. In the year 2021, it sets up its telecommunication network facilities. The agreement with the government requires the company to decommission the network facilities at the end of the concession period. Based on the current technology , the cost of decommissioning at the end of 10 years is estimated at Php 150,000,000. Because of the changes in technology in decommissioning work, it is reasonably probable that the cost of decommissioning would be reduced by the end of the concession period. The company estimates that there is a 30% (high) chance the cost will be Php 90,000,000. A 40* (medium) chance the cost will be Php 100,000,000 and a 20% (low) chance the cost will be Php 110,000,000. The residual value of the facilities is negligible and no gain or loss is expected from their eventual disposal after 10 years. The current risk free rate of interest is 5% for the risk specific to the liability, the variability of the possible outflows, and additional 10% on the expected cash outflows is considered a reasonable estimate. The present value factors are as follows Present value factor of 5* for 10 periods 0.613913 Present value factor of 10% for 10 periods 0.385543 OUR LADY OF THE PILLAR COLLEGE CAUAYAN COLLEGE OF ACCOUNTANCY INTERMEDIATE ACCOUNTING > Required: 6. What is the amount of provision required for the decommissioning costs that should be recognized and included as additional cost of the facilities? Problem 6: Zinc Company leased equipment from peseta Corp. On July 1, 2015 for an 8 year period expiring June 30, 2017. Equal payments under the lease are Php 600,ooo and are due on July 1 of each year. The first payment was made on July 1, 2015. The rate of interest contemplated by Zinc and Peseta is 10%. The cash selling price of the equipment is Php 3,520,000, and the cost of the equipment on Peseta's accounting records is Php 2,800,000. The lease is appropriately recorded as a ales-type lease. Required: 7. What is the amount of interest revenue that Peseta should record for the year ended December 31, 2015? Problem 7: Dora Company leased office premises to Fox Inc. for a 4 year term beginning January 2, 2016. Under the terms of the operating lease, rent for the first year is Php 216,000 and rent for years 2 through 4 is Php 337,500 per annum. However, as an inducement to enter the lease, Fox was allowed to use the leased asset rent-free for the first three months. Required: 8. In its December 31, 2016 balance sheet of Dora Company, what amount should be rep deferred tax liability? 3/4 Problem 8: Farmer Inc. received the following information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2016: Dec 31, 2015 Dec 31, 2016 Market Value of Plan Assets 3,500,000 3.750,000 Accumulated benefit obligation 4,000,080 4,300,000 Unrecognized net (gains) and losses 75,000) Unrecognized prior costs 500,000 450,000 The service cost component of pension expense for 2016 is Php 300,000 and the amortization of unrecognized prior service cost is Php 50,ooo. The settlement rate is 10* and the expected rate of return is 9x Required: 9. What is the net benefit expense for 2016