Economic life of the equipment

Assignment Help Accounting Basics
Reference no: EM13137119

On January 1, 2011, Franklin Industries leased equipment on an eight-year term at $15,000 annual rental payments, paid in advance. There is a bargain purchase option on December 31, 2018 (end of lease), of $24,000. The economic life of the equipment is estimated to be 15 years. The interest rate is 12 percent.

(1) Give the necessary entries for 2011 assuming all payments after the initial payment are made on December 31.

(2) Give the entry at December 31, 2018, assuming the option is permitted to lapse and that there is no residual value because of obsolescence. Assume 2018 amortization entries have been made.

Reference no: EM13137119

Questions Cloud

Create lp model to maximize the effective audience contact : At most, only 30 newspaper ads are possible. For every 106.7 radio ad, there must be at least two 103.1 Radio ads. Formulate the LP model to determine the number of ads in each outlet and maximize the effective audience contact.
Carryback provisions in the tax law : Applying the carryback provisions in the tax law, compute the net amount of taxes paid (amounts paid less refunds) for the ten-year period ending December 31, 2011
Js mills political theory on power : To what extent do you agree with J S Mill that "the only purpose for which power can be rightfully exercised over any memebr of a civilized community against his will is to prevent harm to others".
Explain what is the amplitude of the response x : In the idealized model attached shown, m = 15 kg, k = 135 N/m, and the viscous damping ratio is 0.15. Assume that an external harmonic force F(t) = 15 cos 4 t acts on the system with F0=15 N and forcing frequency of 4 rad/s.
Economic life of the equipment : On January 1, 2011, Franklin Industries leased equipment on an eight-year term at $15,000 annual rental payments, paid in advance. There is a bargain purchase option on December 31, 2018 (end of lease), of $24,000. The economic life of the equipme..
Population health framework : Discuss how these three determinants combine and affect the equity (or inequity) of the population group you have chosen Stakeholders, this includes
Conclude types of batteries are having same mean life : Variance hour 100 and battery y: sample size 12,mean hour 1020,variance hour 121. can you conclude that two types of batteries are having the same mean life?
What is the total cost to be allocated to city department : Sanilac County has a lease on a lawn mower for $2500 per month and $.02 per minute of operation. Operating costs for fuel, oil, technicians, and so on are all variable at $.03 per minute. Departments had projected a need for 100,000 minutes per mo..
Necessary journal entries to record the transactions : Provide the necessary journal entries to record the transactions for Wilcox for the period January 2, 2011 through December 31, 2012.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Differentiate restricted funds in nonprofits and governments

Differentiate between accounting for restricted funds in nonprofits and governments. Examine some of the possible reasons GASB issued statement 54 clarifying the reporting and classification of funds for governmental accounting.

  Primary goals of internal control

An introduction to internal controls, explaining in your own words the two primary goals of internal control.

  Noncontrolling interest share of thelma net income

Thelma's reported net income for 2006 was $119,000. What is the noncontrolling interest's share of Thelma's net income?

  Materials and labour budget revisions

Discuss each request below for a budget revision, putting what you see as both sides of the argument and reach a conclusion as to whether a budget revision should be allowed.

  Prepare an analysis for ed management

Prepare an analysis for ED management that compares processing the butter further with selling the product immediately at split off.

  Equivalent units of production-weighted average method

Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.

  Why not use the direct write-off method

What is the reason behind the FASB requiring the Allowance method for Bad Debt accounting? Why not use the Direct Write-Off method?

  What amount of cash should be reported

Modern Mother Magazine has received cash subscriptions on April 1, 2009 in the amount of $3,600,000 for the next three years. Their year-end is December 31, 2009.

  How would that revenue be measured

Change of mind gives gallery a $1m surprise' and determine whether the gallery should treat the donation as revenue. Further, if the donation is treated as revenue, how would that revenue be measured?

  Determine the budgeted manufacturing overhead rate

a. Determine the budgeted manufacturing overhead rate for each department.  b. Prepare the necessary journal entries to summarize the March transactions for Department 100.  c. What is the total cost of Job A?

  Investment in the new machine

The machine would have no salvage value. The machine would reduce labor and other operating costs by $76,000 per year. The internal rate of return on the investment in the new machine is closest to:

  Specific identification costs

Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?

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