Find what is the total income derived by the company

Assignment Help Accounting Basics
Reference no: EM132820826

Superfast Company used leases as a method of selling its products. In 2018, the company completed construction of a jet plane. On January 1, 2018, the jet plane was leased to Jett W. on a contract specifying that ownership of the jet will transfer to the lessee at the end of the lease period. Cost of the jet plane 800,000 Fair value of the jet plane at commencement of lease 1,300,000 Lease payments payable in advance 150,000 Estimated residual value 200,000 Implicit interest rate 12% Date of first lease payment January 1, 2018 Lease term 20 years PV of an annuity due of 1 at 12% for 20 periods 8.37 PV of an ordinary annuity of 1 at 12% for 20 periods 7.47 PV of 1 at 12% for 20 periods 0.10

Problem 1. What is the total interest that the company will earn over the lease term?

A. 1,744,500

B. 1,924,500

C. 1,944,500

D. 2,200,000

Problem 2. What is the total income derived by the company from the lease for the year 2018?

A. 455,500

B. 588,160

C. 606,160

D. 608,160

Reference no: EM132820826

Questions Cloud

Compute what the sales revenue for the current year is : Allowance for doubtful accounts 1,000,000. Assuming that the cost of sales is 75% of the sales revenue, the sales revenue for the current year is
Description of the compensation and benefits plan : Provide a brief description of the compensation and benefits plan. Explain how this plan met or did not meet your needs.
Describe how forecasting can be used to implement the policy : Describe how forecasting can be used to implement this policy and highlight any limitations of the usage of forecasting. Compare and contrast the different.
Introduction to employee benefits with keith foot : Briefly explain what lessons are from the video "An Introduction to Employee Benefits with Keith Foot" for someone in the role of an Employee Benefit
Find what is the total income derived by the company : Superfast Company used leases as a method of selling its products. What is the total income derived by the company from the lease for the year 2018?
Construct a cost-volume-profit chart : Construct a cost-volume-profit chart, assuming maximum sales of 10,000 units within the relevant range
Write one learning objective for canadian tire retail : -Write one learning objective for Canadian Tire retail sales trainees who will be attending a one -day workshop on how to provide better customer service.
Conduct a training needs analysis : What are the steps needed to conduct a training needs analysis and include organizational, task, cost-benefit, and person analysis?
Find what was balance of unearned service revenue account : The Unearned Service Revenue account shows, What was the balance of the Unearned Service Revenue account before the adjusting entry was recorded?

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