Tamarisk Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Tamarisk agrees to pay 7% of its net sales as a variable lease payment. Tamarisk does not pay any fixed payments. Tamarisk is a highly successful company that has achieved over $1,400,000 in net sales over the last 7 years. Both Tamarisk and Highpoint forecast that net sales will be a much greater amount than $1,400,000 in subsequent years. As a result, it is highly certain that Tamarisk will make payments of at least $98,000 ($1,400,000 × 7%) each year. What is the lease payment amount Tamarisk should use to record its right-of-use asset? Lease payment $
Tamarisk Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Tamarisk agrees to pay 7% of its net sales as a variable lease payment. Tamarisk does not pay any fixed payments. Tamarisk is a highly successful company that has achieved over $1,400,000 in net sales over the last 7 years. Both Tamarisk and Highpoint forecast that net sales will be a much greater amount than $1,400,000 in subsequent years. As a result, it is highly certain that Tamarisk will make payments of at least $98,000 ($1,400,000 × 7%) each year. What is the lease payment amount Tamarisk should use to record its right-of-use asset? Lease payment $
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 9P
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Tamarisk Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Tamarisk agrees to pay 7% of its net sales as a variable lease payment. Tamarisk does not pay any fixed payments. Tamarisk is a highly successful company that has achieved over $1,400,000 in net sales over the last 7 years. Both Tamarisk and Highpoint
What is the lease payment amount Tamarisk should use to record its right-of-use asset?
Lease payment $ |
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