Company a leases its equipment from company b in each of

Reference no: EM13600376

Company A leases its equipment from Company B. In each of the following cases, assuming none of the other criteria for capitalizing leases are met, determine whether the lease would be cpaital lease or an operating lease un FASB Statement No. 13. The decision is to be based only on the terms presented, considering each case independently.

a. The lease requires payment of $9,000 per year in advance plus executory cost of $500 per year. the lease perios is 3 years, and Co. A 's incremental borrowing rate is 12%. The fair value of the equipment is $28,000.

b. The lease requires payments of $6,000 per year in advance, which includes executory costs of $500 per year. The lease period is 3 years, and Company A's incremental borrowing rate is 10%. The fair value of the equipment is $16,650.

Reference no: EM13600376

Questions Cloud

A company leases some of the equipment it uses the lease : a company leases some of the equipment it uses. the lease term is 5 years and the lease payment are to be made in

Te principle managers follow when they only investigate : the principle managers follow when they only investigate significant departures from the plan is commonly known as

The milwaukee recreation center is planning its annual : the milwaukee recreation center is planning its annual fundraiser. the event committee has developed the following

What is the contribution margin for this companywhat is the : the following information is available for a company sales 1000000 selling expenses-variable 22000 selling

Company a leases its equipment from company b in each of : company a leases its equipment from company b. in each of the following cases assuming none of the other criteria for

Standard overhead per direct labor hour bsed on normal : standard overhead per direct labor hour bsed on normal monthly capacity of 30000 hours fixed 2700030000 hours....

Imagine managerial accounting did not exist suggest what : imagine managerial accounting did not exist. suggest what would or would not occur and describe the implications with a

George masonry accepted a four-month 10 interest 1800 note : george masonry accepted a four-month 10 interest 1800 note from earth tones on july 1 2008. the entire balance is

Huey concrete co pours concrete slabs for single-family : huey concrete co. pours concrete slabs for single-family dwellings. tudor construction co which operates outside hueys

User Account

All Pages