Use the following information for the next five items: On January 1, 2019, Sindel Corporation purchased...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Use the following information for the next five items: On January 1, 2019, Sindel Corporation purchased a machine by issuing a noninterest-bearing note requiring ten payments of P350,000, payable at the start of each year. The prevailing market rate for obligations of this nature is 8%. The company also incurred the following costs in relation to the machine: transportation, P51,000; installation, P85,000; testing, P68,000; insurance for the year, P26,000; training for machine operator, P43,000; and safety rails and platform, P101,000. The machinery is ascertained to have a 10-year useful life. The contract with the supplier calls for payment of dismantling and decommissioning costs. Sindel is required to pay P310,000 at the end of the contract (e.g. end of Year 10). The appropriate discount rate on the commencement date is 5.4%, 4.9% as at December 31, 2019, and 4.75% as at December 31, 2020. Sindel Corporation also entered into a separate service contract with the vendor for quarterly repairs on January 1, 2019. Quarterly payments of P50,000 are payable at the end of each quarter. Note: Round off present value factors to three decimal places (x.xxx). Round off amounts to the nearest peso. Based on the information above, answer the following: 1. What is the amount of asset retirement obligation to be presented in the statement of financial position as at December 31, 2019? 2. What is the carrying amount of the machine as at December 31, 2019? 3. How much is the total interest expense for the year ended December 31, 2020? 4. How much is the adjustment to the asset retirement obligation with respect to the December 31, 2020 yearend revaluation? 5. What is the carrying amount of the notes payable - net of current portion, as at December 31, 2020? Use the following information for the next five items: On January 1, 2019, Sindel Corporation purchased a machine by issuing a noninterest-bearing note requiring ten payments of P350,000, payable at the start of each year. The prevailing market rate for obligations of this nature is 8%. The company also incurred the following costs in relation to the machine: transportation, P51,000; installation, P85,000; testing, P68,000; insurance for the year, P26,000; training for machine operator, P43,000; and safety rails and platform, P101,000. The machinery is ascertained to have a 10-year useful life. The contract with the supplier calls for payment of dismantling and decommissioning costs. Sindel is required to pay P310,000 at the end of the contract (e.g. end of Year 10). The appropriate discount rate on the commencement date is 5.4%, 4.9% as at December 31, 2019, and 4.75% as at December 31, 2020. Sindel Corporation also entered into a separate service contract with the vendor for quarterly repairs on January 1, 2019. Quarterly payments of P50,000 are payable at the end of each quarter. Note: Round off present value factors to three decimal places (x.xxx). Round off amounts to the nearest peso. Based on the information above, answer the following: 1. What is the amount of asset retirement obligation to be presented in the statement of financial position as at December 31, 2019? 2. What is the carrying amount of the machine as at December 31, 2019? 3. How much is the total interest expense for the year ended December 31, 2020? 4. How much is the adjustment to the asset retirement obligation with respect to the December 31, 2020 yearend revaluation? 5. What is the carrying amount of the notes payable - net of current portion, as at December 31, 2020?
Expert Answer:
Answer rating: 100% (QA)
Answer Solution Answer 1 Asset Retirement Obligation as on December 31 2019 P 310000 ... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
Use the following information for the next four questions: The following information pertains to Fujin Network Group, Inc.'s intangible assets: 1. On January 1, 2019, the company signed an agreement...
-
Use the following information to complete Keith and Jennifer Hamilton's 2015 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Form 1040,...
-
Use the following information for the next two (2) questions: Henry Co., a machinery dealer, sells a machine for P22,200 under a 1 year warranty contract that requires the company to replace all...
-
If the firm's lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if? a. The market price is $51 b. The price is $36 c....
-
Franklin Plumbing purchases land and building for a combined price of $ 525,000. The assessor valued this property for tax purposes at $ 410,000: $ 195,000 for the land and $ 215,000 for the...
-
How do archaic Homo sapiens differ from region to region and from recent human skeletons?
-
The 60 mm x 60 mm oak post is supported on the pine block. If the allowable bearing stresses for these materials are oak = 43 MPa and pine 25 MPa, determine the greatest load P that can be...
-
The council members of a small town have decided that the earth levee that protects .the town from a nearby river should be rebuilt and strengthened. The town engineer estimates that the cost of the...
-
1.A transformer has 210turns in the primary coil and 30 turns in the secondary coil. 2.When a 20 V potential difference and 800 W power are outputted from the secondary coil, 3.what is the potential...
-
SoxyBack, a manufacturer of fancy men's socks worn by fashionable gentlemen everywhere, is located in Oshkosh, Wisconsin. The socks are sold directly to fashion-conscious men all over North America....
-
Suppose that you are a management consultant and have been asked by your client to propose a management plan for creating and rolling out a new or completely revised wellness program. Your client can...
-
Discuss the different types of HRIS T&D applications and their reporting and decision-support capabilities.
-
Outline how standard desktop applications such as a spreadsheet or database can be used to set up a basic T&D system.
-
Merit increases require a single performance number, while most incentive plans have multiple and varying performance measures. How can the PM system meet both needs?
-
Describe which characteristics of HR metrics and workforce analytics are likely to result in greater return on investment and organizational impact.
-
Discuss how a manager might make sure that the performance plan for each of her direct reports was driven by organizational strategy and the business plan. How can information systems support this...
-
A particle moves on a straight line and its distance, x metres, from O at time t (seconds) is given by x=2 + 2 sin (4t). a) Sketch the graph of x against t for t = [0, 1.5]. b) What is the particle's...
-
Two mutually exclusive investment alternatives are being considered. Alternative A requires an initial investment of $20,000 in a machine. Annual operating and maintenance costs are anticipated to be...
-
No Doubt Company includes 1 coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2019, No Doubt Company purchased 8,800 premiums at 80...
-
The records for the Clothing Department of Wei's Discount Store are summarized below for the month of January (HK$ in thousands). Inventory, January 1: at retail HK$25,000; at cost HK$17,000...
-
Candice Willis will invest $30,000 today. She needs $150,000 in 21 years. What annual interest rate must she earn?
-
The state-space representation is based on a state function \(x\) satisfying the first order ODE \(\tau_{1} \dot{x}=x_{o}\left(\alpha-\tau_{2} \dot{\alpha} ight)-x\), where argument...
-
Obtain the vortex lift line slope, given by Eq. 8.14, for a supersonic delta wing. Eq. 8.14 Ky = -(cos A) ?
-
The delta wing given in Fig. 8.59 has the supersonic lift line slope, according to Puckett and Stewart, as follows \[ \begin{aligned} & \frac{d C_{l}}{d \alpha}=\left(2 \pi \cot \Lambda /...
Study smarter with the SolutionInn App