Can manabee deduct this fee as a current expense

Assignment Help Accounting Basics
Reference no: EM133111003

Question - Last year, Manabee Inc. leased a computer system from ICS Company for five years. After using the system for only 10 months, Manabee realized that it was no longer adequate for its expanding business needs. As a result, Manabee negotiated with ICS to terminate the original lease and enter into a new five-year lease under which ICS would provide Manabee with an expanded, upgraded computer system. ICS would not agree to the arrangement unless Manabee paid a $200,000 lease cancellation fee. Can Manabee deduct this fee as a current expense, or must Manabee capitalize the fee as a leasehold cost and amortize it over the five-year term of the new lease?

Reference no: EM133111003

Questions Cloud

Find the ebit breakeven point : Please help me solve it with Excel. Find the EBIT breakeven point using the information below: Plan A: Plan B:$42 million in debt $62 million in debt 5.25% inte
Estimate the expected return of microsoft using capm : Estimate the expected return of Microsoft using CAPM (Please provide details on your estimation. You need to estimate average annualized risk free rate and mark
Represent a disruption while transportation : The electric car does not represent a disruption while transportation as a Service (TaaS) is a disruption.
Is the electric vehicle a disruption : Is the electric vehicle a disruption? Displaces incumbents
Can manabee deduct this fee as a current expense : Can Manabee deduct this fee as a current expense, or must Manabee capitalize the fee as a leasehold cost and amortize it over the five-year term
What is the free cash ?ow for the firm : The firm recorded $200 in depreciation and paid $200 in interest. What is the free cash ?ow for the firm?
Argumentative research essay on given topic : Argumentative Research Essay on given topic - sources are required for this paper. They must be credible, reliable, and current
Calculate the price of the option : Calculate the price of the option assuming a risk-free interest rate of 4% and plot the binomial tree with the estimated final and intermediate option prices at
Prepare crane may journal entries : Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs. Prepare Crane May journal entries

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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