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Lessee Comapny enters into a lease agreement on July 1, 2010, for equipment. The following data are relevant to lease agreement. 1. The term of the non-cancelable lease is 10 years, with no renewal option. Payments of $120,000 are due on June 30 of each year. 2. The equipment has an economic life of 12 years. 3. Lessee depreciates similar machinery it owns on the sum-of-the-years'-digits basis. 4. The lessee pays all executory costs. The residual value of the equipment is expected to be $50,000, but not guaranteed. 5. Lessee's incremental borrowing rateis 15% per year.Lessee is aware that the lessor used an implicit rate of 12% in computing the lease payments. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. INSTRUCTIONS: (a) Indicate the type of lease to the Lessee and Lessor. (b) Prepare the journal entries on the books of lessee and lessor through December 31, 2011, and at the end of the lease assuming that the actual residual value was 1) $65,000 and 2)$40,000. (c) Assuming that the residual value is guranteed, prepare the journal entries on the books of lessee and lessor through December 31, 2011, and at the end of the lease assuming that the actual residual value was 1) $65,000 and 2) $40,000.
What is your conclusion about the fairness of the recorded balance in accounts payable for pinnacle manufacturing as it affects the income statement and balance sheet?
What is the amount of the gross profit? Compute the gross profit percentage (gross profit divided by sales). Will the income statement necessarily report a net income? Explain"
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Suppose a consumer has a daily income of $100 and purchases just two goods A and B. The price of good A is $5 and the price of good B is $4.
Foreign Currency Transactions and Hedging Foreign Exchange Risk 433 EXCEL CASE-DETERMINE FOREIGN EXCHANGE GAINS AND LOSSES
After the course, Danny spent the last day sightseeing. During the trip, Danny also paid $140 a day for meals, and $80 a day for a rental car. What amount of these travel-related expenditures may Danny deduct as business expenses.
In a job-order costing system, direct labor costs usually are recorded initially with a debit to:
A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed overhead of $120,000. The budget for 25,000 hours would reveal total overhead costs of:
Prepare the journal entries to record above events in the accounts of S & X. . Assume that distribution of earnings onNovember 30 was payment of a dividend that was declared on November20.
Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Stallman report as its December 31 inventory?
The comparative advantages and disadvantages of ideal versus normal standards. The factors that should be included in setting the price and quantity standards for direct materials, direct labor, and manufacturing overhead.
On January 2, 2007, Riley Corporation issued 20,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2010, Riley Corporation declared and paid its first dividend.
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