A) Prepare an amortization schedule for the lessor for 2021 and 2022. B) Prepare the journal entries on the lessor's books on January 1, 2021 and December 31, 2021.
Q: What is the total Share Holder's Equity
A: Shareholders' equity is the owners' equity which is the owners claim over net assets of the company.…
Q: On January 1, 2021, Small company leased a machine from Huge Company. The following information…
A: The lease liability in the books of the lessee on the reporting date is reported at the present…
Q: Two grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a…
A: The direct material budget is the budget that is prepared at the beginning for the quantity and cost…
Q: 33. Monker Dining Room Furniture manufactures two models of dining table sets: Traditional brand…
A: Introduction: A budget forecasts destiny's financial savings and expenditures, in addition to sales…
Q: A cement manufacturer has supplied the following data: 220,000 Tons of cement produced and sold…
A: Increase in sales volume is increase in number of units. 220000 tons + 5℅ = 231000 tons
Q: Question 11 of 11 - 17 ⠀ Pina Colada Company exchanges old delivery equipment for new delivery…
A: Cost of new delivery equipment = Fair value + Cash paid = 41500 + 6700 = 48200 Loss on disposal =…
Q: The following relate to trade discounts: 1. Trade discounts are given to customers to induce them to…
A: The trade discounts are the discounts given by the seller to attract the customers to purchase goods…
Q: On January 1, 20x1, REEDY SLENDER Co. purchased fixtures at an installment price of $520,000. REEDY…
A: Three equal installments = P480,0003 = P160,000 Calculation of present value annuity factor (PVAF)…
Q: that Watts will work one-fourth of the total time devoted the partnership and Lyon will work…
A: The partnership comes into existence when two or more persons agree to do the business and further…
Q: Question No. 4 The books of STUVWXYZ Corp. disclosed at year-end a cash balance of P687,570 while…
A: A bank reconcilement report is defined as a document furnished by a business entity in which the…
Q: Batch-related costs are added to which of the following costs in break-even analysis? 1. variable 2.…
A: Break-even analysis shows the level of sales or units to be sold to cover the fixed expenses of the…
Q: The Hiei Company has a cycle time of 1.5days, uses a Raw and In Process (RIP) account and charges…
A: Material cost to be backflushed from RIP to Finished Goods:
Q: Coronado Industries sells 50000 units for $13 a unit. Fixed costs are $350000 and net income is…
A: Sales is a process wherein one gives the product or service to the other.One buying is the purchaser…
Q: 9th deposit is m
A: Given Information: Amount Deposited each year is P10,000 Time period is 9 years Interest rate is 14…
Q: Rardin Corporation makes a product with the following standard costs: Standard Quantity or Hours…
A: Material price variance is the difference between actual cost of direct material purchased and…
Q: Gary Company leased a music studio from Prada company on a 6-year lease term at P250,000 annual…
A: Initial measurement: Lease liability = P1,252,520 Right-of-Use Asset = P1,252,520
Q: Determine the NLF, NSF and the liquidity ratio for the FY 2021; Determine the days receivable, Days…
A: A]. NLF = Net Long Term Financing = Long Term Financing — Net Fixed Assets =…
Q: Prepare a statement showing the pricing of issues, on the basis of: (a) First In First Out (FIFO)…
A: FIFO- first in first out LIFO- Last in first out FIFO method issues the old units first to the…
Q: (in $000) June July August A. $15,000 C. $11,667 Begin. Inv. 70 60 20 Purchases COGS 30 40 10 50 50…
A: In the context of the given question, we are required to compute the inventory depreciation…
Q: ABC Company received a P1,800,000, 90-day, 12% note from a customer as payment for goods sold on…
A: In the context of the given question, we are required to compute the loss on discount to be recorded…
Q: Deeds Company sells custom-made machine parts to industrial equipment manufacturers by bidding cost…
A:
Q: Calculate the percent change in net income from Quarter 1 to Quarter 2 from the following income…
A: The net income is calculated as difference between total revenue and total expenses.
Q: a) What is the net present value of the proposed investment, assuming Daneche uses a 12% discount…
A: Net Present Value = Present Value of all Cash Inflows - Present Value of all Cash Outflows…
Q: Simms Corp. is considering a project that has the following cash flow data. What is the project's…
A: Internal Rate of Return is that rate at which Present Value of Cash Inflow is equal to Present value…
Q: The board of directors of Bibiko Inc. decided on December 15, 2021, to wind up international…
A: Restructuring means that company changes form of the operations like the change in the capital…
Q: Mr Alex opened furniture shop called Alex Furniture Shop and completed the following transactions in…
A: The journal entries represent the country entry sustain which means a transaction effected a minimum…
Q: 16) The account "Cash" began with a zero balance and then had the following changes: increase of…
A: Introduction: Cash: Cash is the most liquid asset. Cash is a current asset item to be reported in…
Q: What is the meaning of each financial ratio?
A: Introduction: A financial ratio is a statistic that is frequently provided by two numbers acquired…
Q: 1. Statement I. If the deposit or advance results from company’s operating activities, the liability…
A: In the context of the given question, we are required to find the correct answer from the available…
Q: Required
A: Cash budget is used in forecasting to determine supplier payment, receipts from customers which in…
Q: The following transactions took place at Carrington Company Limited during the past year: Equipment…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Matt Company uses a standard cost system. Information for raw materials for Product RBI for the…
A: Formula: Material purchase price variance = (Standard material price - Actual material price) x…
Q: Prepare Journal entries? A. July 1, issued common stock for cash, $15,000 B. July 15, purchased…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: if the cash available for distribution amounted to P75,000, Joker will receive? if Heart were to…
A: Minimum cash available before the profit and loss ratio is used so that the distribution of cash to…
Q: Zest Company noted the following information regarding its returnable containers for fiscal year…
A: Answer: c. P 80,000
Q: Parekoy Company acquires 150,000 of the 1,000,000 Marekoy Company’s common stock for P500,000 cash…
A: Non Controlling Interest: It is the ownership of the equity less than 50%, It is arises at the time…
Q: Complete the below table to calculate the price of a $1.5 million bond issue under each of the…
A: The price of a bond is calculated by adding the present value of the interest received over the life…
Q: Instructions: 1. Prepare ten-column journal entries (with description) that were required to adjust…
A: Adjustment Entries in Books of Universe Company Trans. No. Particulars Debit Credit…
Q: The partners Aces, Hearts, Cloves and Joker share profit and loss equally. Capital balances before…
A: Here discuss about the liquidation process to get the amount received by the partner in the…
Q: Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it…
A: The requirement is to find the book value under the straight-line method (SLM), Declining Balance…
Q: 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: ABC Co. distributes annual bonus to its sales manager. The company reported 2 million profit for…
A: The net profit after tax is calculated as difference between net income and income tax.
Q: For Business Plan 500,000-capital 117,705-equipment 1,577,067.40-salary *When making the product 500…
A: Here discuss about the business plan with the details of projection made for the sales and cost of…
Q: O'Shaughnessy Inc. sells a product for $90 per unit. The variable cost is $65 per unit, while fixed…
A:
Q: Proportional Tax- Progressive Tax- Regressive Tax- Estate Tax- Gift Tax-
A: Tax is the amount which is paid by every type of person to the government and which is used by the…
Q: What is
A: It is uncollectible from the debtors due to bankruptcy, financial problems, or collections by the…
Q: 9) Manufacturers Southern leased high-tech electronic equipment from International Machines on…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Computer Programmer $75/hour Architect $8,000 flat fee Attorney $250/hour Bankers 2% of capital…
A: $1 MM means $1000000. Cost of bank services= $1000000*2% = $…
Q: Account Balances a. During February, $94,830 was paid to creditors on account, and purchases on…
A: The ending balance of accounts payable can be calculated by adding up purchases on account and…
Q: Which one of the following depends on the level of output or activity? O building rent cost O…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Lessor Accounting Issues Ramsey Company leases heavy equipment to Terrell Inc. on March 1, 2019, on the following terms: 1. Twenty-four lease rentals of 2,950 at the beginning of each month are to be paid by Terrell, and the lease is noncancelable. 2. The cost of the heavy equipment to Ramsey was 55,000. 3. Ramsey uses an implicit interest rate of 18% per year and will account for this lease as a sales-type lease. Required: Prepare journal entries for Ramsey (the lessor) to record the lease contract on March 1, 2019, the receipt of the first two lease rentals, and any interest income for March and April 2019. (Round your answers to the nearest dollar.)Leased Assets Koffman and Sons signed a four-year lease for a forklift on January 1, 2016. Annual lease payments of $1,510, based on an interest rate of 8%, are to be made every December 31, beginning with December 31, 2016. Required Assume that the lease is treated as an operating lease. Will the value of the forklift appear on Koffmans balance sheet? What account will indicate that lease payments have been made? Assume that the lease is treated as a capital lease. Prepare any journal entries needed when the lease is signed. Explain why the value of the leased asset is not recorded at $6,040 (1,5104). Prepare the journal entry to record the first lease payment on December 31, 2016. Calculate the amount of depreciation expense for the year 2016. At what amount would the lease obligation be presented on the balance sheet as of December 31, 2016?Lessee Accounting Issues Timmer Company signs a lease agreement dated January 1, 2019, that provides for it to lease equipment from Landau Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: The lease is noncancelable and has a term of 5 years. The annual rentals are 83,222.92, payable at the end of each year, and provide Landau with a 12% annual rate of return on its net investment. Timmer agrees to pay all executory costs directly to a third party on December 1 of each year. In 2019, these were insurance, 3,760; property taxes, 5,440. In 2020: insurance, 3,100; property taxes, 5,330. There is no renewal or bargain purchase option. Timmer estimates that the equipment has a fair value of 300,000, an economic life of 5 years, and a zero residual value. Timmers incremental borrowing rate is 16%, it knows the rate implicit in the lease, and it uses the straightline method to record depreciation on similar equipment. Required: 1. Calculate the amount of the asset and liability of Timmer at the inception of the lease. (Round to the nearest dollar.) 2. Prepare a table summarizing the lease payments and interest expense. 3. Prepare journal entries on the books of Timmer for 2019 and 2020. 4. Next Level Prepare a partial balance sheet in regard to the lease for Timmer for December 31, 2019. Use the present value of next years payment approach to classify the finance lease obligation between current and noncurrent. 5. Next Level Prepare a partial balance sheet in regard to the lease for Timmer for December 31, 2019. Use the change in present value approach to classify the finance lease obligation between current and noncurrent.
- Lessee Accounting Issues Sax Company signs a lease agreement dated January 1, 2019, that provides for it to lease computers from Appleton Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: 1. The lease term is 5 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year. The computers are not specialized for Sax. 2. The computers have an estimated life of 5 years, a fair value of 300,000, and a zero estimated residual value. 3. Sax agrees to pay all executory costs directly to a third party. 4. The lease contains no renewal or bargain purchase options. 5. The annual payment is set by Appleton at 83,222.92 to earn a rate of return of 12% on its net investment. Sax is aware of this rate. Saxs incremental borrowing rate is 10%. 6. Sax uses the straight-line method to record depreciation on similar equipment. Required: 1. Next Level Examine and evaluate each capitalization criteria and determine what type of lease this is for Sax. 2. Calculate the amount of the asset and liability of Sax at the inception of the lease (round to the nearest dollar). 3. Prepare a table summarizing the lease payments and interest expense. 4. Prepare journal entries for Sax for the years 2019 and 2020.Sales-Type Lease with Unguaranteed Residual Value Lessor Company and Lessee Company enter into a 5-year, noncancelable, sales-type lease on January 1, 2019, for equipment that cost Lessor 375,000 (useful life is 5 years). The fair value of the equipment is 400,000. Lessor expects a 12% return on the cost of the asset over the 5-year period of the lease. The equipment will have an estimated unguaranteed residual value of 20,000 at the end of the fifth year of the lease. The lease provisions require 5 equal annual amounts, payable each January 1, beginning with January 1, 2019. Lessee pays all executory costs directly to a third party. The equipment reverts to the lessor at the termination of the lease. Assume there are no initial direct costs, and the lessor expects to be able to collect all lease payments. Required: 1. Show how Lessor should compute the annual rental amounts. 2. Prepare a table summarizing the lease and interest receipts that would be suitable for Lessor. 3. Prepare a table showing the accretion of the unguaranteed residual asset. 4. Prepare the journal entries for Lessor for the years 2019, 2020, and 2021.Determining Type of Lease and Subsequent Accounting On January 1, 2019, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: The lease is noncancelable and has a term of 8 years. The annual rentals arc 35,000, payable at the beginning of each year. The interest rate implicit in the lease is 14%. Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for 1 at the end of the lease term, December 31, 2026. The cost of the equipment to the lessee is 150,000, and the fair value is approximately 185,100. Ballieu incurs no material initial direct costs. It is probable that Ballieu will collect the lease payments. Ballieu estimates that the fair value is expected to be significantly greater than 1 at the end of the lease term. Ballieu calculates that the present value on January 1, 2019, of 8 annual payments in advance of 35,000 discounted at 14% is 185,090.68 (the 1 purchase option is ignored as immaterial). Required: 1. Next Level Identify the classification of the lease transaction from Ballices point of view. Give the reasons for your classification. 2. Prepare all the journal entries tor Ballieu for the years 2019 and 2020. 3. Discuss the disclosure requirements for the lease transaction in Ballices notes to the financial statements.
- Determining Type of Lease and Subsequent Accounting On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of 100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is 2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswells incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of 7,000 annually, related to taxes on the property, are paid by Caswell directly to the taxing authority on Dec. 31 of each year. Required: 1. Determine what type of lease this is for the lessee. 2. Prepare appropriate journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019 and 2020.Sales-Type Lease with Guaranteed Residual Value Calder Company, the lessor, enters into a lease with Darwin Company, the lessee, to provide heavy equipment beginning January 1, 2017. The lease is appropriately classified as a sales-type lease. The lease terms, provisions, and related events are as follows: The lease is noncancelable, has a term of 8 years, and has no renewal or bargain purchase option. The annual rentals are 65,000, payable at the end of each year. The interest rate implicit in the lease is 15%. Darwin agrees to pay all executory costs directly to a third party. The cost of the equipment is 280,000. The fair value of the equipment to Calder is 308,021.03. Calder incurs no material initial direct costs. Calder expects that it will be able to collect all lease payments. Calder estimates that the fair value at the end of the lease term will be 50,000 and that the economic life the equipment is 9 years. This residual value is guaranteed by Darwin. The following present value factors are relevant: PV of an ordinary annuity n = 8, i = 15% = 4.487322 PV n = 8, i = 15% = 0.326902 PV n = 1, i = 15% = 0.869565 Required: 1. Determine the proper classification of the lease. 2. Prepare a table summarizing the lease receipts and interest income earned by Calder for this lease. 3. Prepare journal entries for Calder for the years 2019, 2020, and 2021. 4. Next Level Prepare partial balance sheets for December 31, 2019, and December 31, 2020, showing how the accounts should be reported. Use the present value of next years payment approach to classify the lease receivable as current and noncurrent. 5. Next Level Prepare partial balance sheets for December 31, 2019, and December 31, 2020, showing how the accounts should be reported. Use the change in present value approach to classify the lease receivable as current and noncurrent.Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement dated January 1, 2019, that provides for it to lease non-specialized heavy equipment from Scott Rental Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: 1. The lease term is 4 years. The lease is noncancelable and requires annual rental payments of 20,000 to be paid in advance at the beginning of each year. 2. The cost, and also fair value, of the heavy equipment to Scott at the inception of the lease is 68,036.62. The equipment has an estimated life of 4 years and has a zero estimated residual value at the end of this time. 3. Adden agrees to pay all executory costs directly to a third party. 4. The lease contains no renewal or bargain purchase options. 5. Scotts interest rate implicit in the lease is 12%. Adden is aware of this rate, which is equal to its borrowing rate. 6. Adden uses the straight-line method to record depreciation on similar equipment. 7. Executory costs paid at the end of the year by Adden are: Required: 1. Next Level Determine what type of lease this is for Adden. 2. Prepare a table summarizing the lease payments and interest expense for Adden. 3. Prepare journal entries for Adden for the years 2019 and 2020.
- Lessee and Lessor Accounting Issues Diego Leasing Company agrees to provide La Jolla Company with equipment under a noncancelable lease for 5 years. The equipment has a 5-year life, cost Diego 25,000, and will have no residual value when the lease term ends. The fair value of the equipment is 30,000. La Jolla agrees to pay all executory costs (500 per year) throughout the lease period directly to a third party. On January 1, 2019, the equipment is delivered. Diego expects a 14% return on its net investment. The five equal annual rents are payable in advance starting January 1, 2019. Required: 1. Assuming this is a sales-type lease for the Diego and a finance lease for the La Jolla, prepare a table summarizing the lease and interest payments suitable for use by either party. 2. Next Level On the assumption that both companies adjust and close books each December 31, prepare journal entries relating to the lease for both companies through December 31, 2020, based on data derived in the table. Assume that La Jolla depreciates similar equipment by the straight line methodComprehensive Landlord Company and Tenant Company enter into a noncancelable, direct financing lease on January 1, 2019, for nonspecialized equipment that cost the Landlord 280,000 (useful life is 6 years with no residual value). The fair value of the equipment is 300,000. The interest rate implicit in the lease is 14%. The 6-year lease requires 6 equal annual amounts payable each January 1, beginning with January 1, 2019. Tenant pays all executory costs directly to a third party on December 1 of each year. The equipment reverts to the lessor at the termination of the lease. Assume that there are no initial direct costs. Landlord expects to collect all rental payments. Required: 1. Next Level (a) Show how landlord should compute the annual rental amounts, (b) Discuss how the Tenant Company should compute the present value of the lease payments. What additional information would be required to make this computation? 2. Next Level Prepare a table summarizing the lease and interest receipts that would be suitable for Landlord. Under what conditions would this table be suitable for Tenant? 3. Assuming that the table prepared in Requirement 2 is suitable for both the lessee and the lessor, prepare the journal entries for both firms for the years 2019 and 2020. Use the straight-line depreciation method for the leased equipment. The executory costs paid by the lessee are in 2019: insurance, 700 and property taxes, 800; in 2020: insurance, 600 and property taxes, 750. 4. Next Level Show the items and amounts that would be reported on the comparative 2019 and 2020 income statements and ending balance sheets for both the lessor and the lessee, using the change in present value approach.Lessee and Lessor Accounting Issues The following information is available for a noncancelable lease of equipment entered into on March 1, 2019. The lease is classified as a sales-type lease by the lessor (Anson Company) and as a finance lease by the lessee (Bullard Company). Assume that the lease payments are nude at the beginning of each month, interest and straight-line depreciation are recognized at the end of each month, and the residual value of the leased asset is zero at the end of a 3-year life. Required: 1. Record the lease (including the initial receipt of 2,000) and the receipt of the second and third installments of 2,000 in Ansons accounts. Carry computations to the nearest dollar. 2. Record the lease (including the initial payment of 2,000), the payment of the second and third installments of 2,000, and monthly depreciation in Bullards accounts. The lessee records the lease obligation at net present value. Carry computations to the nearest dollar.