Solution-What amount should be reported as gross profit on

What amount should be reported as gross profit on sale

Reference no: EM132812598

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 1: How much is the total financial revenue over the lease term?

Problem 2: What amount should be reported as gross profit on sale?

Problem 3: Based on the information of Rachel Company how much is the interest income for the current year?

Reference no: EM132812598

Questions Cloud

Distinguis authentic vs transformational leadership : Distinguish between authentic leadership, transformational leadership, and servant leadership. Are all necessary to change individuals

What are different types of record keeping : What are different types of record keeping that can be used for WHS?

What are the legal aspects of nursing practice : In the United States Nurses are held accountable for their practices. In the USA every State has a Board of Nursing that regulates nursing practice.

E-commerce at yunnan lucky air : After reading the case "E-commerce at Yunnan Lucky Air," reflect on the challenges of the organization as they relate to costs.

What amount should be reported as gross profit on sale : How much is the total financial revenue over the lease term? Based on the information of Rachel Company how much is the interest income for the current year?

How should the Land be presented as at the end of first year : On August 1, 2020, the national government granted XYZ Co. a parcel of land located in Cavite. How should the Land be presented as at the end of first year

Discuss ways you might be able to apply the principle : Some individuals are comfortable framing their practice with Watson while others prefer different theories or a collection of theories.

How much would the variable cost per unit of touring model : How much would the variable cost per unit of the touring model have to change before it had the same breakeven point in units as the mountaineering model?

Find the impairment loss : On the date, company purchased a machine for Rs. 1,500,000 with an estimated useful life of 30 years. Find the impairment loss

User Account

All Pages

What amount should be reported as gross profit on sale

Reference no: EM132812598

Reference no: EM132812598

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT