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Esche Company manufactures ice rink resurfacers (known as zambonis). Esche manufactures one of its ice rink resurfacers with an estimated economic life of 12 years and leases it to Spectacor for a period of 10 years under a non-cancelable lease. The normal selling price of the machine is $210,482 and its guaranteed residual value at the end of the lease term is $20,000. Spectacor will pay annual payments of $30,000 at the beginning of each year plus all maintenance, insurance, and taxes. Esche incurred costs of $135,000 in manufacturing the equipment. Esche believes that the collectibility of the lease payments is reasonably predictable and that no additional costs will be incurred during the lease period. The implicit rate used is 10%. Required: 1. What kind of lease is this to the lessor and to the lessee? 2. At lease inception, what is the
3. Prepare a 10 year lease amortization schedule using excel. Turn in the schedule and an excel sheet that shows the formulas you used in excel for the Lr and Le. You can get assistance from excel help on how to do a printout of the cell formulas. 4. Prepare all of the lessor's entries for the inception of the lease and the first, second and tenth years. Spectacor returns the machine at the end of the lease. Unfortunately, the value of the machine at the end of the lease has a value of only $18,000 (lower than the guaranteed value of $20,000). What would Spectacor be required to do when it returns the machine? What entries would Esche make when the machine is returned? 5. List all the entries made by Spectacor in the final year of the lease.
On that date, when the market price of Hunter was $14 per share, there were 90,000 shares of Pierson outstanding. What gain and net reduction in retained earnings would result from this property dividend?
The local garden club, an exempt organization, had gross unrelated business income during the year of $15,000. Its costs associated with this income were $9,800. What is its unrelated business income tax?
Our book distribution division sells to national bookstores. Our division allows for up to 25% of sales in returns. For the past 4 years, returns have averaged 20%. We record revenue based on revenue recognition when the right of return exists.
If your new strip mall will have 15,000 square feetof retail space available to be leased, to which businesses should you lease and why?
Snyder, Inc., which has excess capacity, received a special order for 4,000 units at a price of $15 per unit. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the curr..
Roark Company paid $630,000 for a basket purchase that included land, a building and equipment. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately:
Elly, whose husband died in Dec. 2009, maintains a household in which her dependent daughter lives. What is her filing status for the tax year 2009? (Note: Elly is the executor of her husband's estate.)
The acquisition, what amounts in the Equipment account appear on Hooker's separate balance sheet and on the consolidated balancesheet?
if you have 20 journal entries for the past 6 months that need to be re-calculated to reflect a 20% commission payout on 15 employee's what method would you use to show that your method of calculation is accurate?
In each case, compute the amount that should be reported in the operating activities section of the statement of cash flows under the direct and indirect method.
When a process costing system is used, explain how the normal and abnormal spoilages information influences on.
Subtract the $60,000 write-off) b) Prepare the journal entry for the year-end adjustetn to the Allowance for Doubtful Accounts balance as of Dec 31,2007
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