User Account

All Pages

How would Image Maker Company measure

Assignment Help Accounting Basics
Reference no: EM132593860

Question - Image Maker Company enters into a lease of nonspecialized digital imaging equipment with Agee Equipment Inc on January 1, 2020. Image Maker Company is a manufacturer of digital imaging equipment that uses both direct sales and leases as a means of selling its products. The following table summarizes information about the lease and the leased assets.

Lease term - five years, no renewal option

Economic life of the leased equipment - six years

Purchase option - None

Annual lease payments - $1,100

Payment date - Annually on January 1 (first payment is made at lease commencement)

Fair value of the leased equipment - $5,000

Image Maker Company's carrying value of the leased equipment - $4,500

Interest rate implicit in the lease - 7.04%

The present value of the lease receivable is $3,722

The present value of the unguaranteed residual asset is $178

Title to the asset remains with Image Maker Company upon lease expiration

Agee Equipment Inc does not guarantee the residual value of the equipment at the end of the lease erm and Image Maker Company does not obtain any third-party residual value insurance

Estimated fair value of the equipment at the end of the lease term is $250

Agee Equipment Inc pays for all maintenance of the equipment separate from the lease

There are not initial direct costs incurred by Agee Equipment Inc

Image Maker Company does not provide any incentives

Image Maker Company determines that the lease is a sales-type lease

Required -

1) How would Image Maker Company measure and record the lease?

2) How would Image Maker Company account for the leasing transaction after lease commencement?

Reference no: EM132593860

Questions Cloud

Discuss the organization and the family role : Discuss the organization and the family role in every one of the heritages mentioned about and how they affect (positively or negatively) the delivery.
How might be used by the human resource function : Give an example of how it might be used by the Human Resource function? Explain variance analysis and its importance to management.
How administrators can develop education attainment policy : Explain how administrators can develop an education attainment policy within their organization. For example: requiring a BSN for all non-entry level RN.
Should xia make or buy the part : Should Xia make or buy the part?Xia Co. currently buys a component part for $8 per unit. Xia believes that making the part would require $4.20 per unit
How would Image Maker Company measure : The present value of the lease receivable is $3,722. How would Image Maker Company measure and record the lease
Explain how you would disseminate results of your project : The dissemination of EBP results serves multiple important roles. Sharing results makes the case for your decisions. It also adds to the body of knowledge.
Describe the importance of pre-exercise nutrition choices : Describe the importance of pre- and post-exercise nutrition choices. Provide examples of foods that are appropriate selections for each category.
What are the relevant cost for xia to make or buy the part : What are the relevant cost for Xia to make or buy the part? Xia believes that making the part would require $3.30 per unit of direct materials
Discuss about the type and scope of the proposed change : As a professional, you will be called upon to share expertise, inform, educate, and advocate. Your efforts in these areas can help lead others through change.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determine the flexible budgeting

The department actually completed 750 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.

  What is the companys weighted-average cost of capital

A company provides the following financial information: Cost of equity 20%, What is the company's weighted-average cost of capital

  Wren co operates a chain of gift shops the company

wren co. operates a chain of gift shops. the company maintains a defines contribution pension plan for its employees.

  Prepare journal entries for credit card sales transactions

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system)

  Bravo baking uses standard costing to analyze its

bravo baking uses standard costing to analyze its performance. the data below is provided for your use in determining

  What is the project simple rate of return

Advertising, salaries, and other fixed out-of-pocket costs $ 880,000. What is the project simple rate of return? What is the project's net present value

  Compute the predetermined overhead rate

Yancey Productions is a film studio that uses ajob-order costing system. Compute the predetermined overhead rate

  What are appropriate entries related to the premium

When the bonds were issued, they sold for 101. What are appropriate entries related to the premium? In the debt service fund

  Prepare the cost of goods manufactured schedule

Show the presentation of the ending inventories on the June 30, 2014, balance sheet.

  My proposal to research as a cultural anthropologist

I would propose that research is done on success, and how to enhance the educational experience that would help develop a well rounded individual to succeed in any culture of choice.

  What is the share of each partner on the capital

On January 1, Don and Goldman had a capital balance of $17,000.00 and $34,000 respectively. What is the share of each partner on the capital?

  Deduct as a medical expense

In addition, Lonnie paid the contractor $5,000 to construct an entrance ramp to his home and $7,000 to widen the hallways to accommodate his wheelchair. Lonnie's AGI for the year was $80,000. How much of these expenditures can Lonnie deduct as a m..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd