Calculate the finance cost recognized in the statement of comprehensive income for the year ended December 31, 2023. a. P289,250 b. 410,000 c. 500,000 d. 385,000
Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…
A: Last year's feasibility cost treated as a sunk cost which means already incurred in past by the…
Q: Which type of expenditure is included in the term "exploration and evaluation" of mineral resources
A: the term exploration and evaluation of mineral resources is search for minerals and entity has…
Q: require: What is the maximum price per wheel that VA should be willing to pay LA if a transfer were…
A: Transfer pricing is one of the methodology used in cost accounting. This is used for pricing of…
Q: Jan. Issued 1,000 shares of Common Stock, $2 par for $12 per share. Record the journal entry.
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…
Q: oduct Line Elimination Quiet Feet Inc. produces three different types of shoes. Complete the below…
A: Quiet feet Inc produces 3 different products namely Boots, Sneakers, and Sandals. Here Quiet feet…
Q: The following information applied to Fenn, Inc. for 2022: Merchandise purchased for resale…
A: Inventoriable cost is the combination of net purchase and the freight in expenses. The net purchase…
Q: Microsoft Excel Ele Edit New Insert Format Tools Date Window Help ✔n. Σ 100% BIUR E%-A- E17 A B 1…
A: "Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Cost and Costing, as well as the importance of calculating costs in product management, may be…
A: Cost refers to the value of money that has been used to produce or manufacture something. It can…
Q: Clin Corporation has an overhead crane that has an estimated remaining life of 10 years. The crane…
A: Net Present Value The net present value demonstrates its applicability in capital budgeting. It…
Q: 2. The gift tax payable of Mr. Alba on the July 14 donation is Mr. and Mrs. Alba gave the following…
A: As per Section 98 There shall be levied, assessed, collected and paid upon the transfer by any…
Q: h of the following statements is inapplicable to qualified tuition programs? Up to $10,000 per year…
A: Qualified Tuition Programme : Its refers to the schedule 529 plan, which is established and…
Q: Prepare the necessary adjusting entries for the following independent transactions: 1. Alps Co.…
A: PPE means Property, Plant, and Equipment that is being held by the business. This is one of the…
Q: Prove that profit function will yield an amount that is twice the capital
A: Profit is the amount of money which has been made by the company during the period or by doing the…
Q: On June 1, Rogers Company purchased $2,990 of supplies on account and debited Supplies. At the end…
A: Lets understand the basics. Adjustment entry is required to pass to record correct amount of revenue…
Q: Trent Co. uses the retail inventory method. The following information is available for the current…
A: >Under the Retail Inventory method, the Inventory at the end is first calculated at Retail value.…
Q: 14. Why does the need for an accounting period cause problems?
A: Although the accounting period is arbitrary, businesses must adopt it since the IRS requires them to…
Q: 5. Journalize and post the adjusting entries using the following information: a. Insurance expired…
A: Adjusting Entry – Adjusting Entries are the entries that make the accrual principle work for the…
Q: explain how the idea of value creation under stakeholder theory differs from that under positive…
A: Here discuss about the details of the difference between the stakeholders theory with the positive…
Q: GAS" Company does not segregate sales and sales taxes at the time of sale. The sales register total…
A: Sales and Sales tax both are different, sales is a part of revenue whereas Sales tax is a part of…
Q: Debit Credit Cash 67500 Accounts Receivable 46000 Allowance for Doubtful accounts…
A: Since we answer up to 3 sub-parts, we'll answer the first 3. Please resubmit the question and…
Q: Zannel plc is considering a new project to produce a revolutionary surveillance device. The initial…
A: NPV (Net Present Value) represents the difference between the present value of future expected cash…
Q: The company's total shareholders' equity as of 12/31/2020 is $1,777,000 Common stock; par value of…
A: Multi-step income statement approach is an approach that categorizes the income and expenses as…
Q: On December 1, Young Corporation exchanged 5,000 shares of its P25 par value common stock held in…
A: Common stock is a security that represents ownership in a company. Managers are appointed by common…
Q: Journal entry
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…
Q: e adjusted trial balance of Gobyerno Financial Couriers at June 30, 2022, the end of t cal year,…
A: Accounting: It is the process of recording, classifying , summarising , interpretating analysing the…
Q: Government grants related to income are presented preferably as Other income in the income statement…
A: As per IAS 20 Accounting for government grant and disclosure of government assistance Government…
Q: (a) The bank statement balance is $4,690. (b) The cash account balance is $5,080. (c) Outstanding…
A: Introduction: Bank reconciliation statement: To reconcile the differences between Cash book and pass…
Q: the 2 questions below are wrong can youble check them plaese For Addison's filing status, the…
A: Here discuss about the details of calculation of total amount of taxable income with the net tax due…
Q: Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and…
A: Sales 80000*360 28800000 Direct Material 80000*30 2400000 Direct Labor 80000*50 4000000…
Q: 21- Sent a bill to R. Hernandez, P2, 500 for car service rendered at his wedding. 23- Gas and oil…
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…
Q: A businessman purchased an asset for 250,500.00. It has an estimated life of 10 years, after which…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Q: Journal entry 7 Bought motor vehicle by cheque for RM4,300
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…
Q: 8. What is the difference between accumulated depreciation and depreciation expense? A
A: Depreciation expense is the periodic depreciation charge that a business takes against its assetsin…
Q: ARE YOU RIGHT OR WRONG? 1. Ideally, each salary check was handed to the employee, who signs a…
A: Introduction:- Payroll check is issued for the payment of salary. Payroll is the process of paying…
Q: On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was…
A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…
Q: Ali Mamat Enterprise Trial Balance as at 31 December 2019 Particulars Sales Purchases Salaries Motor…
A: Introduction: Balance sheet: All assets and liabilities are shown in Balance sheet. It tells the net…
Q: A and B formed a partnership. The partnership agreement stipulates the following: • Annual salary…
A: The partnership comes into existence when two or more persons agree to do the business and further…
Q: Problem 8 For each transaction below, tell which account is debited and which account is credited.…
A: Particulars Debit Credit Cash A/c Dr. 50,000.00 Ordinary Shares 50,000.00…
Q: Milo Corporation has two products in its ending inventory, each accounted for at the lower of cost…
A: Designated market value is the middle value of the three components that is the Net realisable…
Q: of account balances. Accounts Payable $39700 Dividends $ 21900 Accounts Receivable 67900 Equipment…
A: A balance sheet is a document that investors and other stakeholders use to obtain a sense in respect…
Q: The Delap Company accounts for non-current assets using the cost model. On 25, April 2016, Delap…
A: The impairment loss included in the statement of comprehensive income amounts to the difference in…
Q: Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children…
A: As she is a surviving spouse she has to use joint filing status for two years. The standard…
Q: On January 1st, 20x0 "ABC" Company borrowed $150,000 for 4.00 years from a local bank. According to…
A: The interest paid over the term of a loan can be computed by deducting the amount borrowed from the…
Q: a.) In January 2021, NBDB incurred the following expenses for the salaries of its regular employees…
A:
Q: Factors affecting investment decisions
A: Introduction: The Investment decision is the decision taken by shareholders or top-level management…
Q: On June 1, 2022, Pitt Corp. sold merchandise with a list price of Php 5,000 to Burr on account. Pitt…
A: Cost net of trade discount = List price - trade discount Net purchase = Purchase - discount…
Q: On January 1, 2022, Yencay, Inc. signs a 10-year noncancelable lease agreement to lease a storage…
A: Here discuss about the details of type of lease which are incurred in perspective of lessor and…
Q: What is the labor cost per concrete block? (There is no overtime)
A: $1.50 is the labor cost per concrete block.
Q: Manufacturing Costs: Variable Manufacturing Costs: Direct Materials P 10 per unit 5 Direct Labor…
A: Explanation of Concept Cost is the expenses which have been incurred for production, marketing and…
Step by step
Solved in 3 steps
- 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.Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
- Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.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.)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.
- 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.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.On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
- 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.Comprehensive 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 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.
