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Find how much is gain or loss on sale of delivery equipment

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Reference no: EM132775939

On January 1, 2015, Gale Co. sold delivery equipment costing P1,000,000 with accumulated depreciation of P150,000 in exchange for a 3-year, P1,800,000 noninterest-bearing receivable due as follows:

Expected date of collection        31-Dec-2015        31-Dec-2016        31-Dec-2017

Amount of cash flow                      1,000,000              600,000          200,000

1,800,000

The prevailing rate of interest for this type of note is 12%.

Problem 1. How much is the gain or loss on sale of delivery equipment in 2015?

a. Nil

b. 663,580

c. 513,580

d. 1,513,580

Problem 2. How much is the interest income for 2015?

a. Nil

b. 181,630

c. 83,425

d. 188,728

Problem 3. How much is the carrying amount of the note on December 31, 2015?

a. 695,210

b. 876,008

c. 178,635

d. 512,399

Problem 4. How much is the current portion of the note on December 31, 2015?

a. 600,000

b. 516,575

c. 83,425

d. 178,635

Problem 5. How much is the noncurrent portion of the note on December 31, 2015?

a. 600,000

b. 516,575

c. 83,425

d. 178,635

Reference no: EM132775939

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