Reference no: EM132748100
Question: On January 1, 2020, Dufferin Corp. enters into a 10-year non-cancellable lease with Pine Ltd. to lease equipment with an estimated useful life of 11 years and a fair value of $6,000,000. The borrowing rate on the lease is 8%. Dufferin uses the straight-line method to depreciate assets. The lease contains the following provisions:
- Semi-annual lease payments of $438,000 (the payments include $38,000 for property taxes), payable on January 1 and July 1 of each year.
- A guarantee by Dufferin Corp. that Pine Ltd. will realize $200,000 from selling the asset at the expiration of the lease.Both companies adhere to IFRS.
Instructions: - Calculate the present value of the minimum lease payments over the life of the lease. Round to the nearest dollar.
- What kind of lease is this to Dufferin Corp.? Why?
- Provide a lease amortization schedule for the full lease. You should prepare your schedule using Excel and copy it into your Word document. The lease amortization schedule provides you an opportunity to check that your present value calculation is correct.
- Prepare the journal entries for Dufferin for the first year of the lease.
|
What is the economic order quantity for camel cigarettes
: A store sells four packs of Camel cigarettes each day. Ordering cost is $8.00 per order, and Camel cigarettes cost $3.20 per pack. Three days after an order is.
|
|
Journalize the allocation of net income
: Khalid and Hashem are co-partners in the Alexandria Company. According to the partnership agreement the division of net income is 60%: 40% respectively
|
|
Compute the ending inventory
: Current Attempt in Progress: Presented below is information related to Ivanhoe Corporation for the current year. Beginning inventory $606,900.
|
|
Discuss the value of a good questionaire design
: Discuss the value of a good questionaire design. Explain the main benefits of including a brief introductory in questionnaires. The response must be typed.
|
|
Prepare the journal entries for dufferin for the first year
: On January 1, 2020, Dufferin Corp. enters into a 10-year non-cancellable lease with Pine Ltd. to lease equipment with an estimated useful life of 11 years.
|
|
Describe substantive procedures to obtain audit evidence
: Pineapple Beach Hotel Co. (Pineapple) operates a hotel providing accommodation, leisure facilities, and restaurants. Its year end was April 30, 2016.
|
|
Does carol recognize a gain on loss on the distribution
: In 2002, Carol and Alice formed C&A partnership by contributing cash. Note: neither of them contributed property using Sec. 721. They share profits.
|
|
Calculate percent profit breakeven metric for price change
: A vendor on Peachtree sells bratwurst hot dogs for $4.15. His cart is open from 9 - 5, Monday through Friday. His variable costs average $0.65 per hot dog.
|
|
Which should be used to record the value of land
: Sally Jones acquired 5,000 shares of $5 par value stock in exchange for land valued by an appraiser at $50,000. Her brother, John Jones, bought a large number.
|