the amount that should be reported by Lucas Corporation as the lease liability on its December 31, 2022 financial statement is? How much is the balance of the right-of-use asset as of December 31. 2022?
Q: 4. How much is the cumulative translation credit that should be presented in the statement of…
A: translation gain as a component of other comprehensive income Net assets are the difference between…
Q: Which of the following statements correctly describes the reporting of cash? O Restricted cash funds…
A: Introduction: Cash is classified as a current asset on the balance sheet, so it is increased on the…
Q: Mateen Oil and Gas Company provides the following data: 2019 2020 2021 Unproved property acquisition…
A: Here discuss about the finding cost per BOE which was calculated by using total volume of cost…
Q: PROCESS 1- ACTIVITY IWAN Company started its operations for the year 2022 in the month of May. The…
A: The equivalent units are calculated on the basis of percentage of the work completed during the…
Q: a) Prepare Machi
A: Depreciation of assets has to be calculated and it will reduce the cost of the asset. Assets will be…
Q: 5. Compute the following financial ratios for 2015 and 2016 and interpreting the results in the…
A: as per the guidelines we can provide the answer for 3 sub part ( first 3) of any question . answer…
Q: Cost Costs $6 - Its average cost per unit for each product at this level of activit Alpha $ 30 Beta…
A: Alpha Beta Direct material $ 30.00 $ 12.00 Direct Labour $ 20.00 $ 15.00…
Q: Assume that in a maintenance organization we have the following data: Total number of annual hours =…
A: Maintenance Activity: Maintenance operations include partial or total overhauls at defined times,…
Q: 7. Aaron Cousins is a self-employed VAT consultant. Aaron's business, Bruins VAT Consultancy…
A: National Insurance Contrition is the payment which is to be made by the persons as per UK laws who…
Q: amount of compensation
A: Stock appreciation rights (SARs) are a device used by companies for compensating their employee.…
Q: Labi Company reported a net loss of $13,000 for the year ended December 31, 2021. During the year,…
A: Operating activities means the procedures occurred in the daily running of the business.
Q: 2.Which inputs in a material Employee Benefits estimate is most likely the responsibility of the…
A: Audit refers to the checking as well as inspection of the original books of accounts or financial…
Q: Gallerani Corporation has received a request for a special order of 6,000 units of product A90 for…
A: In special order decision making we should not consider Fixed cost that remains constant.
Q: 5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Questions 7-9 are based on the following lease amortization schedule. The five payments are made…
A: The amortization schedule helps to know the outstanding balance at year end.
Q: A chemical process has a normal wastage of 10% of input. In a period, 2,500bags of material were…
A: Output means the finished goods produced after normal and abnormal loss occurred during the…
Q: During June, the following changes in inventory took place: June 1 Balance…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: b. Forgave the accrued interest for one year amounting to P12,000. Case 5 Brewed entered into two…
A: First of all Summarized all the Transaction Particular Amount Reduced Principal Obligation-…
Q: The following changes in the statement of financial position accounts of MGT were gathered for…
A: The cash flow section from financing activities include the cash flow from long term liabilities,…
Q: ackie, a non-business taxpayer, paid for the following relevant figures (in pesos) anent his…
A: Dutiable Goods are calculated on a CIF basis. Note 1. CIF is Cost, Insurance, and Freight (here…
Q: On January 01, 2020, Sisig Corp. acquired an investment property, and the initial cost of the…
A: The investment property refers to the investment that is either used for capital appreciation or for…
Q: mployee Census (Data) iscount rate (assumption) ecalculation of the future benefit obligations…
A: Employee benefits refer to the perks provided to an employee by the employer beyond his/her salaries…
Q: September with a customer. was uncompieted ember 2017. This is a performance obligation satisfied…
A: The term income statement (P & L) refers to financial statements that summarize income,…
Q: George, Andrea and Oscar have equities in a partnership as follows: George 500,000 Andrea 800,000…
A: The partnership comes into existence when two or more persons agree to do the business and further…
Q: xplain the functioning of different players in financial market.
A: Financial Market In general, a financial market is a market where we can sell and buy securities.…
Q: Stanley sold a building used in his business and held for 5 years for a $50,000 loss. It is the only…
A: A capital asset is an asset that is held for more than one year whereas, a current asset is an asset…
Q: depreciation is taken in the year of acquisition. • No depreciation is taken in the year of…
A: Depreciation under straight line method is: = (Original cost - Residual value) ÷ Useful life
Q: A U Ltd manufactures and sells a single product, the company's sales and expenses for the month of…
A: Break even point means a situation where the is neither profit nor loss. Sales revenue is sufficient…
Q: Kelly K. inc enters a lease agreement for a piece of equipment with a fair value of $45,000 under a…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Many companies recognize that their cost systems are inadequate for today's powerful global…
A: The traditional costing method uses a single overhead recovery rate while in the case of ABC…
Q: Based on the following data, what is the quick ratio, rounded to one decimal place? Accounts payable…
A: Quick ratio measures the entity's capacity to pay off its current obligations using quick assets.
Q: How much is the net cash flow from financing? O (P 285,000) O (P510,000) O (P210,000) O (P445,000)
A: Cash flow from financing activities include the cash paid or received from the financing activities…
Q: Stinehelfer Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs…
A: Particulars Amount Sugar beet cost 56 Crushing cost 13 Total cost for production of beet fiber…
Q: In the accounting literature, there is substantial scepticism towards the adoption of the…
A: The process of defining, assessing, and reporting transactions to regulatory authorities, tax…
Q: Requested: a. Prepare information to determine how much the cost of finished products is transferred…
A: The total cost of producing a product, including raw materials and operating costs, is detailed in a…
Q: 18. Troy's Tire Mart has a replacement value of $965, 000 and is insured for $588, 000, with an 80%…
A: Introduction: A loss is defined as an increase in costs above revenues, whether for a single…
Q: Last month, Laredo Company sold 450 units for $25 each. During the month, fixed costs were $2,520…
A: Breakeven point is the level of sales(or sale units) at which the contribution(Sales - Variable…
Q: What is the total amount of National Insurance contributions payable by Aaron for the contribution…
A: National insurance contribution is the contribution which are made by the taxpayer or an individual…
Q: The total assets of National Co. is funded by both debt and equity with a debt to equity ratio of…
A: Debt to equity ratio is: =Total debts/ shareholders fund or net worth Retained earning break point…
Q: Camille Company has underapplied overhead of P45,000 for the year ended Pefore dispositiop,of the…
A: Cost of goods sold refers the total direct cost which is related with the production cost incurred…
Q: 5. Compute the following financial ratios for 2015 and 2016 and interpreting the results in the…
A: (Note: Since you have posted a multi-part question, we will solve the first three sub-parts. For the…
Q: What are the formulas that were used here?
A: If the rate of return and the periodic payment do not vary, the future value of an annuity can be…
Q: You are a credit analyst of a growing commercial bank and have recently received loan applications…
A: Financial ratios are used to evaluate the performance of the business entity. These are helpful in…
Q: Documentation expenses related to the copy acquisition, 1.5M • Operational loss (studio time lost…
A: Copyright is a such type of asset which falls under the category of the assets under the intangible…
Q: Ex 7- Long-Term Note Payable a) What if the Einstein Corporation decided to raise capital (Cash) by…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: 3ournalize thhe transaction for the purchase of a truck on April 4 for $61,420, paying $5,800 cash…
A: Account Payable: - Account payable refers to the amount of money that a business owes its suppliers…
Q: A problem statement is an unstructured set of statements that describes the purpose of an effort in…
A: Introduction: A problem statement is important in a process improvement project since it helps…
Q: On December 1, 2021, X Co. bought merchandise from Y Co. costing P50,000, terms 2/10, n/30, FOB…
A: Inventory at the end of financial year to be shown in balance sheet , should means the inventory ,…
Q: How much is the loss on excess freight to be recognized in 2023? How much is the inventory to be…
A: On December 31, 2022, the home office of ABC Company sent a shipment of merchandise to its Manila…
Q: 3409 $2319 april not sold Total $7338 $7859
A: The jobs that are not completed yet. Given as, Job January February March Completed Sold AA2…
Step by step
Solved in 5 steps
- 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.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.
- 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.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.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.)
- 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 methodLessee 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.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.
- On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 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.On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.