Techno craft Company sells audio systems. It leases to Marina Sands on January 1, 2020 an...
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Techno craft Company sells audio systems. It leases to Marina Sands on January 1, 2020 an audio equipment with carrying value of P9,000,000, under the following terms: Guaranteed residual value of P2,000,000 at the end of the lease term of 5years. Periodic payment every January 1 and July 1 of 1,328,622 starts on January 1, 2020; Lessor's annual implicit interest rate, which is known by Marina Sands is 10%. Market rate of interest is also 10%. Techno craft incurs commission and other costs related to the lease amounting to P100,000. REQUIRED: a.) How much total profit should Techno craft recognize for the year ended December 31,2020?b.) How much interest expense shall Marina Sands recognized for the year ended December 31,2021? c.) What amount shall Marina Sands report for the equipment at December 31,2021? d.) What amount of interest revenue should Techno craft report for the year ended December 31,2020? e.) What amount of financial asset shall Techno craft report at December 31,2020? Techno craft Company sells audio systems. It leases to Marina Sands on January 1, 2020 an audio equipment with carrying value of P9,000,000, under the following terms: Guaranteed residual value of P2,000,000 at the end of the lease term of 5years. Periodic payment every January 1 and July 1 of 1,328,622 starts on January 1, 2020; Lessor's annual implicit interest rate, which is known by Marina Sands is 10%. Market rate of interest is also 10%. Techno craft incurs commission and other costs related to the lease amounting to P100,000. REQUIRED: a.) How much total profit should Techno craft recognize for the year ended December 31,2020?b.) How much interest expense shall Marina Sands recognized for the year ended December 31,2021? c.) What amount shall Marina Sands report for the equipment at December 31,2021? d.) What amount of interest revenue should Techno craft report for the year ended December 31,2020? e.) What amount of financial asset shall Techno craft report at December 31,2020?
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a To determine the total profit that Techno craft should recognize for the year ended December 31 2020 we need to consider the lease payments and the ... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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