Cullumber Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $505,456, and its guaranteed residual value at the end of the non- cancelable lease termis estimated to be $16.400. The hospital will pay rents of S61.100 at the beginning of each year. Cullumber incurred costs of $227.000 in manufacturing the machine and $13.400 in legal fees directly related to the signing of the lease. Cullumber has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to 0 decimal places, eg. 5,275.) (1) Lease receivable at commencement of the lease s (2) Sales price (3) Cost of sales %24 %24

Question
Cullumber Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a
period of 10 years. The normal selling price of the machine is $505,456, and its guaranteed residual value at the end of the non-
cancelable lease termis estimated to be $16.400. The hospital will pay rents of S61.100 at the beginning of each year. Cullumber
incurred costs of $227.000 in manufacturing the machine and $13.400 in legal fees directly related to the signing of the lease.
Cullumber has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.
Discuss the nature of this lease in relation to the lessor.
The nature of this lease in relation to the lessor is
Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and
the final answers to 0 decimal places, eg. 5,275.)
(1)
Lease receivable at commencement of the lease s
(2)
Sales price
(3)
Cost of sales
%24
%24
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Transcribed Image Text

Cullumber Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $505,456, and its guaranteed residual value at the end of the non- cancelable lease termis estimated to be $16.400. The hospital will pay rents of S61.100 at the beginning of each year. Cullumber incurred costs of $227.000 in manufacturing the machine and $13.400 in legal fees directly related to the signing of the lease. Cullumber has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to 0 decimal places, eg. 5,275.) (1) Lease receivable at commencement of the lease s (2) Sales price (3) Cost of sales %24 %24

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