What should be the amount of gain on sale of machine on dec

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Reference no: EM132767431

On December 31, 2020, Dwarf Corporation sold for P50,000 an old machine having an original cost of P70,000 and a book value of P20,000, the term of the sale were as follows:

P10,000 down payment
P20,000 payable on December 31 each of the next two years

Problem 1: The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the amount of gain on sale of machine on December 31, 2020? (use 4 decimal places on the present value factor)

Reference no: EM132767431

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