Question - On March 1, 2015, Cura Company sold an old equipment to Matthew Company having an original cost of P450,000 and accumulated depreciation of P150,000. Matthew signed a non-interest bearing note requiring payment of P60,000 annually for seven years. The first payment was made on March 31, 2015. The prevailing rate of interest for this type of note at the date of issuance was 10%. Information on present value factors is as follows:
|
Period
|
Present Value of 1 at 8%
|
Present Value of Ordinary Annuity at 8%
|
|
6
|
0.56
|
4.36
|
|
7
|
0.51
|
4.87
|
1. How much should Cura Company report as sales revenue in March 2015?
2. What amount should be reported as gain or loss on sale of equipment?