Payments on the lease are due for five years after its

Assignment Help Accounting Basics

Reference no: EM13606235

Explain what Jordan should do to treat the leases properly as sales-type leases.Jordan Industries manufactures and leases to its customers five-ton construction dump trucks. The lease arrangements are usually as follows:

Payments on the lease are due for five years after its inception, but the present value is not greater than 90% of the fair value of the trucks at the time of the sale.

The trucks revert to Jordan at the end of the lease. Estimated economic life of the trucks is 10 years.No substantial uncertainties exist as to future payments Jordan must make, and potential customers are thoroughly checked for creditworthiness before the trucks are leased to them.

Jordan's accountant has informed the company that there are advantages from a reporting standpoint in treating the leases as sales-type instead of operating leases.

Reference no: EM13606235

Questions Cloud

Perform the following experiment the purpose of this : perform the following experiment the purpose of this experiment is to use a compass to detect the weak magnetic field

A particle moves along a vertical straight line with an : a particle moves along a vertical straight line with an acceleration of a 4v34 when t1 sec. its displacement x 10 ft

Website visitors are often loath to disclose personal : website visitors are often loath to disclose personal information when making a purchase on the internet. despite

The auto parts department of an automotive dealership sends : the auto parts department of an automotive dealership sends out an average of 8 special orders daily. the number of

Payments on the lease are due for five years after its : explain what jordan should do to treat the leases properly as sales-type leases.jordan industries manufactures and

Smith company manufactures widgets newman company has : smith company manufactures widgets. newman company has approached smith with a proposal to sell the company one of the

Calculate the probability that at least 12 in a sample of : the national association of realtors released a survey indicating that a surprising 43 of first-time home buyers

A beam spring system has a mechanical energy by oscillating : a fluid flows through a horizontal pipe of radius 0.02m. the pipe is turned up to a height of 10m and a horizontal pipe

Show the process on a p-v diagram and determine a the final : a piston-cylinder device initially contains steam at 200 kpa and 200c. a linear spring is touching the piston but

User Account

All Pages