Determine the effect on income before income taxes

Assignment Help Taxation
Reference no: EM132191

Comparisons of Operating and Sales Type Leases

On January 1, 2013 Nelson Company leases get property to Queens Company at an annual rental of $60,000 payable in advance at the starting of each year for 8 years. The first payment is gets immediately. The lease property, which is new, cost $175,000 and has an estimated economic life of 8 years and no residual value. The interest rate implicit in the lease is 12% and the lease is noncancelable. Nelson had no other costs related with this lease. It could have accounted for this lease as a sales type lease but mistakenly treated it as an operating lease.

Determine the effect on income before income taxes during the first year of the lease as a result of Nelson's classification of the lease as an operating rather than a sales type lease.

Reference no: EM132191

Questions Cloud

The main types of asphyxiants. how do they affect the body : It is common that people are exposed to more than one hazardous substance at a time. The different substances may interact such that one substance may alter the toxicity of one or more of the chemicals present. Discuss the possible interactions th..
Evaluate the maximum depreciation expense : Evaluate the maximum depreciation expense
Prepare the new etching machine an acceptable investment : Prepare the new etching machine an acceptable investment?
Borrowing needs and preparation of statement of cash flows : Borrowing Needs and Preparation of Statement of Cash Flows
Determine the effect on income before income taxes : Examine and determine each capitalization creiteria and evaluate what type of lease this is for Adden.
What are the main objectives of xenobiotic metabolism : Handling operations for solid/powder substances are often a source of dust generation and are a source of exposure to hazardous substances in industries. Describe in details the measures that can be taken to prevent exposure during the following s..
Prepare a table summarizing the lerase payments : Examine and determine each capitalization creiteria and evaluate what type of lease this is for Adden.
Describe rationale for the nature of the audit report report : Describe the rationale for the nature of the audit report (qualified or unqualified) rendered
The bridging principles for classification of mixtures : Describe the main purpose of the Globally Harmonised System of Classification and Labelling of Chemicals - Outline the bridging principles for classification of mixtures

Reviews

Write a Review

 

Taxation Questions & Answers

  A tax on cigarettes is a good way of raising tax revenue

Discuss- A tax on cigarettes is a good way of raising tax revenue for the government

  Taxable income

Determine taxable income before considering expense.

  Income by ordinary concepts

Explain what is meant by income by ordinary concepts

  Prepare the required journal entry

Prepare the required journal entry to record the tax expense

  Prepare regular corporation tax return

Prepare the C Regular Corporation Tax Return for the Lawson And Norman Enterprise

  Taxation law

Advise the participants in the ‘barter' system of the income tax implications, if any, of participating in the system.

  Payment to the taxpayer

Brief statement in your own words of the facts of the cases.

  Identify the tax issues

Identify the tax issues that are raised and the relevant sections of the legislation. Identify any cases and other sources of law or information that apply.

  Calculate barbs taxable income

Calculate Barb's taxable income? What nonrefundable credit is Barb eligible for based on the information you have?

  Taxation – law and practice

Show the tax issues that are raised and the relevant sections of the legislation.

  Prepare a tax research memo

Prepare a tax research memo to the file that addresses the issues you feel are most relevant to Mimi's various issures.

  Calculate carolines taxable income

Calculate Carolines taxable income

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd