Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians'Leasing purchased a lithotripter from Rand for $2,450,000 and leased it to Mid-South Urologists Group, Incorporated, on January 1,2024.Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1)Lease Description:Quarterly lease paymentsLease termNo residual value; no purchase option$159,882-beginning of each period5 years (20 quarters)5 yearsImplicit interest rate and lessee's incremental borrowing rate 12%$ 2,450,000Economic life of lithotripterFair value of assetRequired:1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the leasethrough the second rental payment on April 1, 2024. Adjusting entries are recorded at the end of each fiscal year (December 31).3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced themachine at a cost of $2.1 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through thesecond lease payment on April 1, 2024.Complete this question by entering your answers in the tabs below.Required 1Required 2LesseeRequired 2LessorRequired 3How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?

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Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,450,000 and leased it to Mid-South Urologists Group, Incorporated, on January 1, 2024. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Lease Description: Quarterly lease payments Lease term $ 159,882-beginning of each period 5 years (20 quarters) 5 years Implicit interest rate and lessee's incremental borrowing rate 12% $ 2,450,000 No residual value; no purchase option Economic life of lithotripter Fair value of asset Required:

Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,450,000 and leased it to Mid-South Urologists Group, Incorporated, on January 1, 2024. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Lease Description: Quarterly lease payments Lease term $ 159,882-beginning of each period 5 years (20 quarters) 5 years Implicit interest rate and lessee's incremental borrowing rate 12% $ 2,450,000 No residual value; no purchase option Economic life of lithotripter Fair value of asset Required:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,260,000 and leased It to Mid-South Urologists Group, Incorporated, on January 1, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $ 147,483-beginning of each period 5 years (20 quarters) Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2024. Adjusting entries are recorded at the end of each…
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,260,000 and leased it to Mid-South Urologists Group, Incorporated, on January 1, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset $ 135,504-beginning of each period 5 years (20 quarters) 5 years 8% $ 2,260,000 Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2024. Adjusting entries are recorded at the end of…
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,090,000 and leased it to Mid-South Urologists Group, Incorporated, on January 1, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2024. Adjusting entries are recorded at the end of each fiscal year (December 31). 3. Assume Mid-South Urologists Group leased the…
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2018. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease Description: Quarterly lease payments $123,990-beginning of each period 5 years (20 quarters) Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset 5 years 12% $1,900,000 Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2018. Adjusting entries are recorded at the end of each…
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians’ Leasing purchased a lithotripter from Rand for $2,260,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease Description: Quarterly lease payments $ 147,483—beginning of each period Lease term 5 years (20 quarters) No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $ 2,260,000 Required:1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1,…
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians’ Leasing purchased a lithotripter from Rand for $1,590,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease Description: Quarterly lease payments $ 103,760—beginning of each period Lease term 5 years (20 quarters) No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $ 1,590,000 Required:1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?2. Compute appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1,…
The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to the Magnetic Imaging Division of Medical Diagnostics, Inc. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form. You should proceed to the requirements below only after completing your worksheet. Required: 1. Check your worksheet by changing the average operating assets in cell B6 to $8,000,000. The ROI should now be 38% arid the residual income should now be $1,000,000. If you do not get these answers, find the errors in your worksheet and correct them. Explain why the ROI and the residual income both increase when the average operating assets decrease. 2. Revise the data in your worksheet as follows: a. What is the ROI? b. What is the residual income? c. Explain the relationship between the ROI and the residual income?
Parktown Medical Center, Ine., is a small bealch care provider owned by a publicly held corporation. It employs 7 salaried physicians, 10 nurses, 3 support staff, and 3 clerical workers. The clerical workers perform such tasks as reception, correspondence, cash receipts, billing, and appointment scheduling. All are adequately bonded. * Life-long Icaring opportumstro see p. asl in pretace. PART I ACCOUNTING INFORMATION SYSTEMS APPLICATIONS Most patients pay for services rendered by cash or check on the day of their visit. Sometimes, however, the physician who is to perform the respective services approves credit based on an interview. When credit is approved, the physician files a memo with one of the clerks to set up the receivable using data the physician gencrates, The servicing physician prepares a charge slip that is given to one of the clerks for pricing and preparation of the patient's bill. At the end of the day, one of the clerks uses the hills to prepare a revenue summary and,…
Surgimed Ghana Ltd. sells technology needed to perform highly complex operations. When a hospital purchases equipment from Surgimed Ghana Ltd., it provides a very specialised piece of instrumentation, which is an integral part of the surgical process, free of charge. The legal ownership of the instruments remains with Surgimed Ghana Ltd. The instruments are returned to Surgimed Ghana Ltd. if they become faulty or at the end of their useful life, which is normally 1·5 years. At this point, Surgimed Ghana Ltd. replaces them with new instruments but retains the right to be reimbursed if the instruments are not returned. The instruments are nearly always returned at the end of their useful life and disposed of as clinical waste. Required: The directors of Surgimed Ghana Ltd. would like advice on the accounting treatment for the instruments sold to the hospital?
On January 2, 2021, Iwilight Hospital purchased a $99, 600 special radiology scanner from Oriole Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight- line method of depreciation is used on this scanner. Annual operating costs with this scanner are $104, 000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2021 from Oriole Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $49,500. (a) Prepare an incremental analysis of…
Consultants notify management of Discount Pharmaceuticals that a stroke medication poses a potential health hazard. Counsel indicates a product recall is probable and is estimated to cost the company $11.75 million. Required: How will this affect the company's income statement and balance sheet this period? Note: Enter your answers in dollars, not in millions (i.e., $5.5 million should be entered as $5,500,000). Amounts to be deducted should be indicated by a minus sign. Assets Balance Sheet Liabilities Contingent Liability S 1,175,000 Stockholders' Equity Common Stock Retained Earnings $ (1,175,000) Revenues Income Statement Expen
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