In 2019, Cheongsan sold a piece of land which had a cost of P1M for a selling price of P4M. The sale called for an assumption by the buyer of a mortgage on the land of P1.5M, cash of P500,000 on the date of sale and installment payments of P500,000 every year thereafter. The land is an ordinary asset. The income to be reported in 2019 under the installment method of reporting income is * 4 O 500,000 O 750,000 O 1,000,000 O 375,000

In 2019, Cheongsan sold a piece of land which had a cost of P1M for a selling price of P4M. The sale called for an assumption by the buyer of a mortgage on the land of P1.5M, cash of P500,000 on the date of sale and installment payments of P500,000 every year thereafter. The land is an ordinary asset. The income to be reported in 2019 under the installment method of reporting income is * 4 O 500,000 O 750,000 O 1,000,000 O 375,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

See similar textbooks

Similar questions

In 2019, Z sold a piece of land which had a cost of P1M for a selling price of P4M. The sale called for an assumption by the buyer of a mortgage on the land of P1.5M, cash of P500,000 on the date of sale and installment payments of P500,000 every year thereafter. The land is an ordinary asset. The income to be reported in 2019 under the installment method of reporting income is?
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
In 2019, Bright Inc. sold its parking lot for P2,400,000 payable on installment. The lot was previously acquired for P1,500,00. The buyer has an outstanding unpaid balance of P1,800,000 as of December 31, 2019, Bright’s year end. Compute Bright’s Gross income on 2019 using the installment method. a. P900,000 b. P675,000 c. P225,000 d. P112,500
In 2021, TPC Incorporated sold investment land with a $474,000 book and tax basis for $775,000. The purchaser paid $100,000 in cash and gave TPC a note for the $675,000 balance of the price. In 2022, TPC received a $105,500 payment on the note ($67,500 principal + $38,000 interest). Assuming that TPC is using the installment sale method, compute its gain recognized in 2022.
Rob Lucci Company sold to another entity a tract of land costing P5,000,000 for P7,000,000 on January 1, 2019. The buyer paid P1,000,000 down and signed a two-year promissory note for the remainder of the purchase price plus 12% interest compounded annually. The note matures on January 1, 2021. REQUIRED: Prepare journal entries for 2019, 2020 and 2021.
On July 1, 2024, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,128,000. The book value of the land on Apache’s books was $1,720,000. Terms of the sale required a down payment of $172,000 and 23 annual payments of $172,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2025. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company?
PLEMACOLA, Inc. sold a piece of land on January 1, 2021. Thecompany purchased the land for P1,000,000. PLEMACOLA received a3-year note of P1,500,000. The cash selling price of the land as of thisdate is P1,190,748. The imputed interest rate on this note is 8%.How much is the unamortized discount as of December 31, 2022?
On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%At what amount should the note be recorded on January 1, 2021?
On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%How much is the interest expense for the year 2022?
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 $Answer
On June 7, 2021, James Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain on the sale. James agreed to accept one payment of P35,000 on August 15 and the second payment of P35,000 on December 15. James had a calendar year-end. What amount of gain was reported during the second, third, and fourth quarters of the year from this sale?
On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%Assuming the notes was issued on June 1,2021, how much is the interest expense for year 2022?