Reference no: EM13763243
On January 1, 2012, Palmer Company leased equipment to Woods Corporation. The following information pertains to this lease.
1. The term of the noncancelable lease is 6 years, with no renewal option. The equipment reverts to the lessor at the termination of the lease.
2. Equal rental payments are due on January 1 of each year, beginning in 2012.
3. The fair value of the equipment on January 1, 2012, is $221,700, and its cost is $181,794.
4. The equipment has an economic life of 8 years, with an unguaranteed residual value of $11,540. Woods depreciates all of its equipment on a straight-line basis.
5. Palmer sets the annual rental to ensure an 11% rate of return. Woods's incremental borrowing rate is 12%, and the implicit rate of the lessor is unknown.
6. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by the lessor.
(Both the lessor and the lessee's accounting period ends on December 31.)
(b) Calculate the amount of the annual rental payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)
Importance of understanding statistics and the challenges
: Locate an individual in your company who exemplifies these characteristics and interview them on the importance of understanding statistics and the challenges they may face with data. Ask them how they demonstrate these characteristics in their jo..
|
Discuss the judicial selection process of your state
: Discuss the judicial selection process of your state (Virginia). Include, at a minimum, the qualifications and steps that are taken in order to select judges for the different kinds of courts within your specific state
|
How would you calculate their net worth
: Fatimah and Ahmad, both 30 years old, own a house worth $120,000 and have a yearly income of $50,000, monetary assets of $15,000, two cars worth $30,000, and furniture worth $10,000. The house has a $100,000 mortgage, they have college loans of $15,0..
|
Describe the basic control process
: Describe the basic control process and discuss the various methods that managers can use to maintain control
|
Important uncertainties surround the amount of costs
: Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by the lessor.
|
Social process and social development theory paper
: Social Process and Social Development Theory Paper and Social Structure Theory Paper
|
Explain fiedlers contingency theory
: Describe who leaders are and what effective leaders and explain Fiedler's contingency theory
|
Sales grew at an average rate
: Your mother has been working in a small bookstore for many years. Her sales in the first year were $38,709, and her sales in the last year were $78,866. If the sales grew at an average rate of 2.00 percent per year, how many years did your mother sel..
|
What is the stock price per share
: FFDP Corp. has yearly sales of $28 million and costs of $12 million. The company’s balance sheet shows debt of $54 million and cash of $18 million. There are 950,000 shares outstanding and the industry EV/EBITDA multiple is 7.5. What is the stock pri..
|