Use the following information for #s 10-12. An entity is a manufacturer of machinery. It uses lease agreements to sell its product. On January 1, 2020, the company leased a machine to another company under the following terms: The lease term is 5 years • The annual rental is P500,000 payable every January 1, starting January 1, 2020 The machine has a cost to the company of P1,600,000 • Implicit interest rate in the lease, known to the lessee is 8% The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value of factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.31, respectively. 10. What amount of sales revenue should be recognized by the entity? a. P2,155,000 b. P2,427,000 c. P2,555,000 d. P1,883,000

Use the following information for #s 10-12. An entity is a manufacturer of machinery. It uses lease agreements to sell its product. On January 1, 2020, the company leased a machine to another company under the following terms: The lease term is 5 years • The annual rental is P500,000 payable every January 1, starting January 1, 2020 The machine has a cost to the company of P1,600,000 • Implicit interest rate in the lease, known to the lessee is 8% The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value of factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.31, respectively. 10. What amount of sales revenue should be recognized by the entity? a. P2,155,000 b. P2,427,000 c. P2,555,000 d. P1,883,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 55P

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Q12: What is Music, Inc.’s 2021 Pre-Tax Income?
What amount of unrealized gain/loss should be shown as component of other comprehensive income in the 2021 statement of comprehensive income? 26,455 10,000 20,562 16,455 What amount of unrealized gain/loss should be shown as component of other comprehensive income in the 2022 statement of comprehensive income? 14,393 19,340 18,500 1,222 What amount of unrealized gain/loss should be shown as component of other comprehensive income in the 2023 statement of comprehensive income? 26,500 8,358 10,982 9,792 What amount of unrealized gain/loss should be shown in the 2023 statement of changes in equity? 16,883 25,233 26,455 10,982
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