Determine the trade in to be reported

Reference no: EM132970271

Axie Company sold vehicles on installment basis. On October 1, 2020, Toyota Model costing P747,600 was sold for P1,236,000 on installment basis. A cash down payment of P216,000 was made. In addition to the cash down payment, a Honda Model was accepted with trade in value of P300,000 and balance is payable in 12 monthly installments amounting to P78,000 due starting at the end of October. The Honda Model has an estimated selling price of P 400,000 after reconditioning the same for P50,000. The normal gross profit, to be considered in the fair value computation, is 10%. Axie already adapted PFRS 15 in recognizing revenue. The market rate of interest is 12%.

Determine the following:
a. Trade In to be reported on December 31, 2020
b. Installment Sales
c. Net Income in 2020
d. Entries to record the transactions in 2020

Reference no: EM132970271

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