On february 20 2012 hooke inc purchased a machine for

Assignment Help Accounting Basics

Reference no: EM13610634

On February 20, 2012, Hooke Inc., purchased a machine for $1,201,920 for the purpose of leasing it. The machine is expected to have a 10-year life, no residual value, and will be depreciated on the straight-line basis. The machine was leased to Sage Company on March 1, 2012, for a 4-year period at a monthly rental of $17,490. There is no provision for the renewal of the lease or purchase of the machine by the lessee at the expiration of the lease term. Hooke paid $28,320 of commissions associated with negotiating the lease in February 2012:

Instructions

(a) What expense should Sage Company record as a result of the facts above for the year ended December 31, 2012?

(b) What income or loss before income taxes should Hooke record as a result of the facts above for the year ended December 31, 2012? (Hint: Amortize commissions over the life of the lease.)

Reference no: EM13610634

Questions Cloud

What voltage would he measure using his homemade voltmeter : suppose the professor on gilligans island needs to measure temperature and happened to find enough iron and constantan

The convective heat transfer coefficient for the exhaust : an axhaust stack thermocouple is inserted into a 20 cm long well made of 5mm-o.d. 0.7 mm-wall-thicknes aisi 316

The current in a 120 v reading lamp is 30 a part a if the : the current in a 120 v reading lamp is 3.0 a part a if the cost of electrical energy is 0.075 per kilowatt-hour how

Builder bug company allocates overhead at 9 per direct : builder bug company allocates overhead at 9 per direct labor hour. job a45 required 5 boxes of direct materials at a

On february 20 2012 hooke inc purchased a machine for : on february 20 2012 hooke inc. purchased a machine for 1201920 for the purpose of leasing it. the machine is expected

Someone suggests that the lifetime t in days of a certain : someone suggests that the lifetime t in days of a certain component can be modeled with the weibull distribution with

Mdden international is a large 7 billion sales successful : madden international is a large 7 billion sales successful international pharmaceuticals firm operating in 23 countries

Determine a the cycle efficiency b the mean temperature of : consider a rankine cycle with a single regenerative feed-water heater. the steam enters the turbine at 30 bar 400c and

How can a company that has a profit can increase its return : 1. how can a company that has a profit can increase its return on investment.2. what is an opportunity and what

User Account

All Pages