Determine the price at which builders

Assignment Help Accounting Basics
Reference no: EM131005385

On June 30, 2011, Georgia-Atlantic, Inc., leased a warehouse facility from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2011. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate Builders used to calculate lease payment amounts. Builders constructed the warehouse at a cost of $2.5 million.

Required:

1. Determine the price at which Builders is "selling" the warehouse (present value of the lease payments) at June 30, 2011 (to the nearest $000).

2. What pretax amounts related to the lease would Builders report in its balance sheet at December 31, 2011?

3. What pretax amounts related to the lease would Builders report in its income statement for the year ended December 31, 2011?

Reference no: EM131005385

Questions Cloud

About the long run decisions of a firm : Suppose we now care about the long run decisions of a firm that has a production function of the form q = 2L + 3K. Draw the isoquant that represents 20 units of output. If the price of each unit of labor is 1, the price of each unit of capital is 2 a..
Prepare the appropriate journal entry on december : Prepare the journal entry for American Food Services at the commencement of the lease on January 1, 2013.
Long run decisions of a firm that has production function : Suppose we now care about the long run decisions of a firm that has a production function of the form q = 4L^1/2 + K. What are the optimal choices of inputs for this firm? Do you find something unusual what compared to the optimal choices for q = 10 ..
Perfectly competitive firm-firms profit at this quantity : Suppose you manage a perfectly competitive firm. Your short-run total cost is given by the following: TC=200+2q2, where q is the quantity produced by your firm. Given this total cost, the firm's short-run marginal cost is given by: MC=4q. If the mark..
Determine the price at which builders : What pretax amounts related to the lease would Builders report in its income statement for the year ended December 31, 2011?
Production depends heavily on low-skilled labor : Name two products and two services whose production depends heavily on low- skilled labor. b. What would happen to the wages of the remaining low-skilled, legal workers after the deportations? c. What would happen to the prices of the goods and servi..
Why is technology such an important part of the labor market : Why is technology such an important part of the labor market? Do you think technology makes workers more or less productive and how does it relate to their wages?
Law is constitutional using analysis of fundamental : From FDR's Folly Chapter 15: Explain and critique the current policy of the Supreme Court in determining whether or not a law is constitutional using analysis of fundamental and non fundamental rights, and give two examples each of fundamental and no..
Explain why there was not widespread support : From FDR's Folly Chapter 13: Explain why there was not widespread support for a U.S. federal pension plan prior to 1935. Explain why there is a pervasive misunderstanding that citizens who have paid Social Security taxes are entitled to benefits when..

Reviews

Write a Review

Accounting Basics Questions & Answers

  What was the percentage rate of return on plan assets

At the end of the year, retiree benefits paid by the trustee were $6 million and cash invested in the pension fund was $7 million. What was the percentage rate of return on plan assets?

  In 2010 the sales revenue was 100 cost of goods sold 60

in 2010 the sales revenue was 100 cost of goods sold 60 depreciation 15 and net income 12. 1110 balances on current

  What are the tax consequences of the incorporation

David organizes White Corporation with a transfer of land (basis of $200,000, fair market value of $600,000) that is subject to a mortgage of $150,000.

  What is the effective interest rate on the note

Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2011 interest accrual, and the March 31, 2012 collection.

  Determine the bonds issue price

The bonds have a $20,000 par value, an annual contract rate of 10%, and mature in 10 years. Required For each of the following three separate situations, (a) determine the bonds' issue price on January

  Calculate dollar amount to be reported as preferred stock

The stockholders' equity section of Kay Corporation at the end of thecurrent year showed: Calculate the dollar amount to be reported as the preferred stock account balance.

  Credit manager on the financial statement items

In your opinion, what could be the possible effects of following the advice of the credit manager on the financial statement items?

  Determining gain and net reduction in retained earnings

What gain and net reduction in retained earnings would result from this property dividend?

  Adjustment to cost of goods sold

Also during 2006 regional sells all the inventory pruchased in 2005 and 2006 to unrelated entities. What is the adjustment to cost of goods sold in the 2006 worksheet elimination?

  Impact of conflict on teams

This week's materials emphasize the complexity surrounding processes designed to maximize team efficiency and performance. For your initial post to this discussion forum, begin by describing how the impact of conflict on teams may be "good, bad, o..

  Possibility of general price-level adjustments

Use of historical costing including the possibility of general price-level adjustments. Why do you think he has made this choice?

  Would most likely be used for a wedding

What type of process  project, job shop, flow shop, and continuous flow  would most likely be used for a wedding? Why?

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