Reference no: EM133085584

Questions -

Q1. MISTLETOE Company is a dealer in equipment. The entity leased equipment to a lessee on January 1, 2021 for an eight-year period expiring January 1, 2029. Equal annual payments under the lease are due at the end of each year beginning December 31, 2021. The lease agreement included a guaranteed residual value of P200,000 and an implicit rate of 10%. It was determined that the fair value of the asset is P3,000,000. The carrying amount is P2,500,000 and that the present value of the minimum lease payment at 10% is P2,760,900. The PV of 1 at 10% for 8 periods is 0.467, and the PV of an ordinary annuity of 1 at 10% for 8 periods is 5.335.

1. What is the total financial or interest revenue over the lease term?

2. How much is the gross investment that should be initially recognized as lease receivable? *

Q2. YULETIDE Corporation reported the following data on January 1, 2021: Projected benefit obligation Fair value of plan assets 10,000,000 9,000,000 During the current year, the actuary determined the current service cost at P2,000,000 and interest cost at P1,000,000. The interest income on plan assets was P900,000 while the actual return on plan assets was P600,000. There was a decrease in the projected benefit obligation due to changes in actuarial assumptions of P200,000. The average remaining service period of the employees is 10 years.

1. What is the defined benefit cost for the current year?

Q3. TINSEL Company implemented a defined benefit plan on January 1, 2021. The following data are provided on December 31, 2021: Projected benefit obligation 103,000 Plan assets at fair value 78,000 Net periodic pension cost 90,000 Employer's contribution 70,000

1. What amount should be recorded as pension liability on December 31, 2021?