Digital x-ray , Science

Digital X-Ray, Inc., has introduced a new line of equipment that may revolutionize the medical profession.  Because of the new technology involved, potential users of the equipment are reluctant to purchase the equipment, but they are willing to enter into a lease arrangement as long as they can classify the lease as an operating lease.  The equipment will replace that Digital X-ray, Inc., has been selling in the past.  It is estimated that a 25% loss of actual sales will occur as a result of the leasing policy for the new equipment.

Management must decide to structure the leases so that they can treat them as operating leases.  Some members of management want to structure the leases so that Digital X-Ray, Inc., as lessor, can classify the lease as a sales-type lease and thus avoid a further reduction of income.  Others believe that they should treat the leases as operating leases and minimize the income tax liability in the short term.  They are uncertain, however, as to how the financial statements would be affected under these two different approaches.  They also are uncertain as to how leases could be structured to permit the lessee to treat the lease as an operating lease and the lessor to treat it as a sales-type lease.

1.   You are asked to respond to the questions raised in this mini case.Be sure to cite and paraphrase any authoritative sources in support of your answer.

2.    Please limit your answers to two (2) typed pages.

Posted Date: 3/18/2013 2:10:21 AM | Location : United States







Related Discussions:- Digital x-ray , Assignment Help, Ask Question on Digital x-ray , Get Answer, Expert's Help, Digital x-ray Discussions

Write discussion on Digital x-ray
Your posts are moderated
Related Questions
ehat is protoplasm and other levels of organization

how does reproduction help the white lipped tree frog survive

Question 1 What are the different types of budgets? Explain the budgeting process for healthcare services Question 2 Explain the concept of demand and supply in healthcare

What is Diffraction Diffraction happens at the edge of an impenetrable body that is large compared to the wavelength of the radio wave. The edge in effect become a source and w

What types of rocks are formed by the lithification of sediments: Sedimentary Rocks

Sinking bodies Fill the overflow can with water to the level of the spout. Select a stone that will go inside the overflow can. Attach a string to the stone and weigh it with a

REQUIREMENTS 1. Stock register of a science laboratory 2. Loose paper sheets 3. Pen 4. Pencil 5. Rubber

Explain the direct and indirect effects of lime application The direct and indirect effects of lime application to acid soils generally are increased crop growth, although thei

Fire Buckets : All labs should be equipped with a fire bucket. The buckets are not used only for carrying water to a fire. This is one of their uses. The other way a fire bucket i

What is the reason for colours of actinide