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On 1/1/14 two firms sign a 6-year lease involving a plant asset with a remaining useful life of 10 years on this date. The fair value of the asset is $700,000. The interest rate implicit in the lease is 10% and the annual lease payments of $120,000 are due each Dec. 31. The contract allows the lessee to purchase the asset at the end of the lease term for a price equal to the asset s fair value at that time. The asset reverts to the lessor at the end of the lease term if the lessee does not exercise the purchase option. Choose the correct statement.
a. lessee accounts for the lease as an operating lease
b. lessee report $70,000 of interest expense for 2014
c. lessee accounts for the lease as an operating lease because the lease term is less than the useful life of the asset
d. lessee accounts for the lease as a capital lease because at least one of the capitalization criteria is met
e. lessee accounts for the lease as a capital lease because there is a purchase option.
Jenny’s Cutting Station is a new concept in haircuts; low cost and very quick. Set in a local mall, Jenny’s offers 15 minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickl..
Harold Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs.
In 2014, its first year of operations, Kimble Corp. has a $770,000 net operating loss when the tax rate is 35%. In 2015, Kimble has $320,000 taxable income and the tax rate remains 35%.
Evaluate, as far as possible, Kanymoon University's benchmarked position. Define what you understand by the term, 'Strategic management accounting'; critically evaluate any academic literature and refer to recent developments on the subject.
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one of the main ways in which the lsquoveil of incorporation can be lifted is when directors breach their duties. this
Determine net operating income after tax (NOPAT) and net income for each alternative and compute return on common shareholders" equity for each alternative (use ending equity).
Explain the financial ratios by detailing the relevancy, interpretation, and what each ratio means relative to the financial health, investor perspective, and stakeholder perspective.
The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,900 direct labor-hours will be required in September. The variable overhead rate is $5.60 per direct labor-hour..
Assume the Blink Company began operations on July 1, 2013. The sole stockholder invested $25,000 in cash and $5,000 of inventory in exchange for common stock. Jul. 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30..
explainingnbsp the relationship between the labour efficiency variance and the variable overhead.the moore company
Stephens Company has a deductible temporary difference of $2,000,000 at the end of its first year of operations. Its tax rate is 40 percent. Stephens has $1,800,000 of income taxes payable. At the end of the first year, after a careful review of all ..
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