On January 1, 2020, Devorak Corporation sold an equipment with a cost of P 500,000 for P 800,000. The buyer, Limbo Company, made a down payment of P 200,000 and signed a noninterest-bearing note for P 600,000 payable in equal annual installment of P 200,000 every December 31. The prevailing interest rate for a note of this type is 10%. The present value of an ordinary annuity of 1 for three periods at 10% is 2.4869.

1) what is the present value of notes receivable?

a. 200,000 b. 497,380 c. 450,780 d. 601, 040

2) what is the selling price of equipment to be recorded on Jan 1?

a. 800,000 b. 697,380 c. 650,780 d. 601,040

3) what is the present value of notes receivables as at Dec 31, 2018?

a. 497,380 b. 531,587 c. 463,173 d. 347,118

PROVIDE SOLUTIONS