FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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P46
On June 1, 2019, Sorn Company signed a 10-year non-cancelable lease for a machine requiring annual payments at the beginning of each lease year. The machine has a useful life of 15 years without salvage value. Title passes to Sorn Company at the lease expiration date. Sorn Company's accounting year ends on December 31 and it uses straight-line method of depreciation for all of its property, plant and equipment, computed to the nearest full month. Aggregate lease payments have a present value of P2,520,000 on June 1, 2019 based on an appropriate rate of interest. For the year 2019, what amount of depreciation expense should Sorn record for the leased machine?
A. P252,000
B. P168,000
C. P147,000
D. P98,000
Current Attempt in Progress
Assume that on December 31, 2024, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage
building from Carla Vista Storage Company. The following information pertains to this lease agreement.
1.
2.
3.
4.
5.
The agreement requires equal rental payments of $67,999 beginning on December 31, 2024.
The fair value of the building on December 31, 2024, is $497,876.
(a)
The building has an estimated economic life of 12 years, a guaranteed residual value of $11,000, and an expected residual
value of $7,100. Kimberly-Clark depreciates similar buildings on the straight-line method.
The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.
Kimberly-Clark's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Kimberly-Clark.
Click here to view factor tables.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Prepare the journal…
Recording Operating Lease-Lessor
Gomez Inc. leases a vehicle from CareMax Inc. on January 1 for a three-year period. Gomez agrees to make $9,600 annual payments beginning on January 1. Prepare the journal entries during the year for
CareMax Inc. assuming that the fair value of the vehicle is $44,800 and it has a useful life of 6 years with no salvage value (depreciated using the straight-line method). CarMax Inc. appropriately classifies the lease
as an operating lease.
Note: Round your answers to the nearest whole dollar.
Account Name
Date
Jan, 1
Dec. 31
Dec. 31
Check
To record receipt of lease payment
To record lease revenue
+
#
To record depreciation
→
=
→
#
Dr.
0
0
0
0
0
0
Cr.
0
0
0
0
0
0
Chapter 8 Solutions
FINANCIAL ACCT-CONNECT
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Straight-line depreciation P1 On January 2, 2016,...Ch. 8 - Prob. 4QSCh. 8 - Computing revised depreciation C2 On January 2,...Ch. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Partial-year depreciation; disposal of plant asset...Ch. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - A Exchanging assets P5 Gilly Construction trades...Ch. 8 - Recording plant asset disposals P2 P5 On January...Ch. 8 - Prob. 25ECh. 8 - Plant asset costs; depreciation methods C1 P1...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Asset cost allocation; straight-line depreciation...Ch. 8 - Computing and revising depreciation; revenue and...Ch. 8 - Computing and revising depreciation; selling plant...Ch. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Teams are to select an industry, and each team...Ch. 8 - Prob. 5BTNCh. 8 - Prob. 7BTNCh. 8 - Prob. 9BTN
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