Accounts for the first year of operations

Assignment Help Financial Accounting
Reference no: EM133307210

Question

Archers Ltd entered into a three-year lease payable at £4,000 a year in advance for an item of machine. The fair value of the machine was £11,182. Assuming the implicit interest in the lease is 8% per annum. What would be the amount of interest be shown in the accounts for the first year of operations (round your answer to nearest £)?

Reference no: EM133307210

Questions Cloud

New business through market multiples. : You will have to get the value of this new business through market multiples.
What is the monthly interest rate on debt : He would have a savings of U$ 3,361.21. Based on the information above, what is the monthly interest rate on the debt?
Security market line : What is measured by the Security Market Line (SML), and how does it differ from the Capital Market Line (CML)? Explain.
Define private pension plan : Define a private pension plan. How does a contributory pension plan differ from noncontributory plan?
Accounts for the first year of operations : What would be the amount of interest be shown in the accounts for the first year of operations.
Bad debts expense using percent-of-sales method : Journalize World Class' Bad Debts Expense using the? percent-of-sales method.
Developing master budget is the sales budget : The starting point for developing a master budget is the sales budget. Service organizations do not need production budgets.
Market expectation of future interest rate : If liquidity influences the yield curve, the forward rate underestimates the market's expectation of the future interest rate.
Explain the disadvantages of offering credit : Why should a business offer credit terms to its customers? Explain the disadvantages of offering credit. How does a bonus issue differ from a rights issue?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the sustainable growth rate

Question - Total asset turnover is 3.20 Profit margin is 6.1% Equity multiplier is 2.00 Payout ratio is 25%. What is the sustainable growth rate

  Dean corporation has two service departments

Dean Corporation has two service departments, Power and Maintenance, and two production departments, Painting and Polishing.

  Values for lump sum assuming annual compounding

Find the following values for a lump sum assuming annual compounding:

  Which does not occur on the company financial statements

Which does not occur on the company's financial statements? Apple Inc. receives information that requires the company to increase its expectations

  What is the purpose of a bank reconciliation

What is the purpose of a bank reconciliation? What are the reasons for differences between the cash reported in the accounting records, and the cash balance in the bank statements?

  How much would the capital structure shift change the firm

If the risk-free rate is 5.0% in the market risk premium at 6.0% by how much would the capital structure shift change the firms cost of equity?

  What amount should place report as capitalized interest

Place Company started construction of a new office building on January 1, 2014, and moved into the finished building on July 1, 2015. Of the building's $5,000,000 total cost, $4,000,000 was incurred in 2014 evenly throughout the year. What amount sho..

  Use the minus sign to enter favorable variances

Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for the year?

  How much would have had in the bank

How much would she have had in the bank at the end of 8 months? HINT: First calculate the interest rate that would have been charged on the loan.

  How much will pay in interest for kristin

Kristin uses her credit card to purchase a new television. The card has an annual rate of 29.9% compounded monthly. How much will she pay in interest?

  Calculate the ratio of depreciation and amortization expense

Calculate the ratio of depreciation and amortization expense for 2011 reported on page 713 in the Consolidated Statements of Cash Flows to the total cost of plant assets reported in the schedule shown on page 747.

  What adjusting entry needed on december to accrue expense is

What the adjusting entry needed on December 31 to accrue this expense is? Lemonade127 Shop received a P23,000 utility bill for December.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd