Determine the price at which builders

Assignment Help Accounting Basics
Reference no: EM131005385

On June 30, 2011, Georgia-Atlantic, Inc., leased a warehouse facility from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2011. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate Builders used to calculate lease payment amounts. Builders constructed the warehouse at a cost of $2.5 million.

Required:

1. Determine the price at which Builders is "selling" the warehouse (present value of the lease payments) at June 30, 2011 (to the nearest $000).

2. What pretax amounts related to the lease would Builders report in its balance sheet at December 31, 2011?

3. What pretax amounts related to the lease would Builders report in its income statement for the year ended December 31, 2011?

Reference no: EM131005385

Questions Cloud

About the long run decisions of a firm : Suppose we now care about the long run decisions of a firm that has a production function of the form q = 2L + 3K. Draw the isoquant that represents 20 units of output. If the price of each unit of labor is 1, the price of each unit of capital is 2 a..
Prepare the appropriate journal entry on december : Prepare the journal entry for American Food Services at the commencement of the lease on January 1, 2013.
Long run decisions of a firm that has production function : Suppose we now care about the long run decisions of a firm that has a production function of the form q = 4L^1/2 + K. What are the optimal choices of inputs for this firm? Do you find something unusual what compared to the optimal choices for q = 10 ..
Perfectly competitive firm-firms profit at this quantity : Suppose you manage a perfectly competitive firm. Your short-run total cost is given by the following: TC=200+2q2, where q is the quantity produced by your firm. Given this total cost, the firm's short-run marginal cost is given by: MC=4q. If the mark..
Determine the price at which builders : What pretax amounts related to the lease would Builders report in its income statement for the year ended December 31, 2011?
Production depends heavily on low-skilled labor : Name two products and two services whose production depends heavily on low- skilled labor. b. What would happen to the wages of the remaining low-skilled, legal workers after the deportations? c. What would happen to the prices of the goods and servi..
Why is technology such an important part of the labor market : Why is technology such an important part of the labor market? Do you think technology makes workers more or less productive and how does it relate to their wages?
Law is constitutional using analysis of fundamental : From FDR's Folly Chapter 15: Explain and critique the current policy of the Supreme Court in determining whether or not a law is constitutional using analysis of fundamental and non fundamental rights, and give two examples each of fundamental and no..
Explain why there was not widespread support : From FDR's Folly Chapter 13: Explain why there was not widespread support for a U.S. federal pension plan prior to 1935. Explain why there is a pervasive misunderstanding that citizens who have paid Social Security taxes are entitled to benefits when..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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