Compute the present value of the lease payments

Assignment Help Accounting Basics
Reference no: EM132634094

Question - Blue Ltd and Sky Ltd enter into a finance lease agreement with the following terms:

Lease term is 3 years

Estimated economic life of the leased asset is 5 years

3 × annual rental payments of $25 000 each payable in advance

Guaranteed residual value at the end of the lease term is $10 000

Initial direct costs of $2000 incurred by the lessee

$5000 is the amount of the residual value guarantee that was expected to be payable by the lessee at the end of the least term

Interest rate implicit in the lease is 10%.

Required - On inception date, compute the present value of the lease payments?

Reference no: EM132634094

Questions Cloud

How would measure the activity effect on performance : If you could choose one (1) item for your career development that you wish your employer would cover, what would it be and why?
What is the amount of current tax payable by Young Ltd : For accounting purposes, plant is depreciated at $50,000 per year. What is the amount of current tax payable by Young Ltd
Financial benefits of undertaking strategic management : He wants you to identify four financial benefits and four non-financial benefits of undertaking strategic management. What would you tell him?
Describe the choice of various performance appraisal methods : Describe performance management, the performance appraisal, and the performance appraisal process. Describe the choice of various performance appraisal methods.
Compute the present value of the lease payments : Guaranteed residual value at the end of the lease term is $10 000. On inception date, compute the present value of the lease payments
Harry redner treatment of industrial capitalism : Discuss your reaction to Harry Redner's treatment of industrial capitalism, the legal-rational state, and techno-science.
Identify at least five types of useful financial information : Identify at least 5 types of useful financial information you would like to use in conjunction with the ratios you could calculate from the information provided
Discuss the leadership style that made a team successful : Team performance and productivity are dependent on the leader and the culture of the organization. Discuss the leadership style
Find the present value of the lease payments : Estimated economic life of the leased asset is 10 years. On inception date, find the present value of the lease payments

Reviews

Write a Review

Accounting Basics Questions & Answers

  On january 1 2013 albacore company had 340000 shares of its

on january 1 2013 albacore company had 340000 shares of its common stock issued and outstanding. albacore issued a 10

  Calculate the amount of overhead costs applied to production

Calculate the amount of overhead costs applied to production if the predetermined overhead rate is $4 per direct labor hour and 1,200 direct labor hours were worked.

  Department w had 2400 units one-third completed at the

department w had 2400 units one-third completed at the beginning of the period 14000 units were transferred to

  Direct method to allocate support costs

Use the direct method to allocate support costs to each of the two principal operating departments, Engineering and Computer Sciences. Prepare a schedule showing the support costs allocated to each department.

  What additional needs does the company have

What are the advantages of Altitude Online adopting a new ERP system compared to simply connecting existing corporate systems?Why isn't an out of the box ERP system enough for Altitude Online? What additional needs does the company have? Is this the ..

  Felton co sells major household appliance service contracts

felton co. sells major household appliance service contracts for cash. the service contracts are for a 1-year 2-year or

  Prepare the journal entries to record the preceding

7 comprehensive receivables problem blackmon corporations december 31 2012 balance sheet disclosed the following

  Summarize authoritative guidance for asset impairments

Summarize authoritative guidance for asset impairments under IFRS. Give two example of events that could cause an asset to be tested for impairment, and recommend best method to determine fair value of an impaired asset.

  How sloan negative retained earnings balance is reflected

Explain how Sloan's negative retained earnings balance is reflected in the consolidated balance sheet immediately following the acquisition

  The financial statements and the notes to consolidated

The financial statements and the Notes to Consolidated Financial Statements of PepsiCo, Inc. are presented in Appendix A.

  How much cash will be collected from customers

The controller has determined that the company collects credit sales as follows: 60% in the month of sale, How much cash will be collected from customers

  Government wide statement of net assets?

Do you have the Government Wide Statement of Net Assets?

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