How much is the total financial revenue over the lease term

Assignment Help Financial Accounting

Reference no: EM132805832

Rachel Company used leases as a method of selling products. In the current year, Rachel Company completed construction of a construction equipment. At the beginning of the current year, the construction equipment was leased on a contract specifying that ownership of thereon will transfer to the lessee at the end of the lease period. The annual lease payments do not include executory costs. Original cost of the construction equipment is P9,000,000. Lease payments payable at beginning of each year is P2,000,000. Estimated residual value is P1,000,000. Implicit interest rate is 12%, 10-year lease term. Present value of an annuity due of 1 at 12% for 10 periods is 6.33 and PV of 1 at 12% for 10 periods is 0.32.

Problem a. How much is the total financial revenue over the lease term?

Problem b. What amount should be reported as gross profit on sale?

Problem c. How much is the interest income for the current year?

Reference no: EM132805832

Questions Cloud

Prepare the income statement shoeing the bifurcation : Prepare the income statement shoeing the bifurcation between the three product lines based on some logical assumptions and the data as provided.

CHCECE004 - Promote and Provide Healthy Food and Drinks : CHCECE004 - Promote and Provide Healthy Food and Drinks Assignment Help and Solution - Compliant Learning Resources, Australia - Assessment Writing Service

Discuss effective approaches that samsung electric : Describe Googles' level of diversification strategies and Discuss effective approaches that Samsung Electric can implement to gain and manage a successful

What is total dollar return from holding the investment : 6% coupon bond at a discount price of $962.50. After one year she sells the bond for $975.00. What is her total dollar return from holding this investment?

How much is the total financial revenue over the lease term : How much is the total financial revenue over the lease term? Rachel Company completed construction of a construction equipment.

Determine opportunities to institute change : Determine opportunities to institute change within the mission and vision statements. Propose three ways that teacher leaders can take on a stronger leadership.

Discuss actions and characteristics of effective leadership : The current CEO of QANTAS Alan Joyce is considered a strategic leader. Identify, and discuss the actions and characteristics of effective leadership

What aspects of culture and society : What aspects of the culture and society do you think would affect your decision making if you were sent there as a manager for multinational firm?

What is the net income on december for a company : What is the net income on December 31, 2019? On March 30, 2019, the Company sold a car to a customer for P525,000 costing P414,000.

User Account

All Pages