Question on january 1 2010 the caswell company signs a

Assignment Help Business Law and Ethics

Reference no: EM13348982

Question :

On January 1, 2010 the Caswell Company signs a 10-year cancelable (at the alternative or either party) agreement to lease a storage building from the Wake Company. The subsequent information pertains to this lease agreement.

1. The agreement needs rental payments of $100,000 at the end of each year.

2. The cost and fair value of the building on 1^st January, 2010 is $2 million.

3. The building has an estimated economic life of 50 years, with no outstanding value. The Caswell Company depreciates same buildings according to the straight-line method.

4. The lease does not hold a renewable option clause. At the termination of the lease, the building reverts to the lessor.

5. Caswell's incremental borrowing rate is 14 percent per year. The Wake Company set the annual rental to make sure a 16% rate of return. (the loss in service value anticipated for the term of the lease)

6. Executory costs of $7,000 yearly, related to taxes on the property, are paid by Wake Company.

Reference no: EM13348982

Questions Cloud

Questioncreate an employee class with enough numbers of : questioncreate an employee class with enough numbers of data members to store employee data of following structure-id

Question on january 1 20x1 clark and lois each contributed : question on january 1 20x1 clark and lois each contributed 110500 to form the kal-el general partnership and the

Question cranston ltd prepares its financial statements : question cranston ltd. prepares its financial statements related to international financial reporting standards. in

Question 1 a being the manager of new bakery co ltd show : question 1 a being the manager of new bakery co. ltd show how your short-run production decision will differ from your

Question on january 1 2010 the caswell company signs a : question on january 1 2010 the caswell company signs a 10-year cancelable at the alternative or either party agreement

Question 1 a explain how the harnessing of information : question 1 a explain how the harnessing of information systems impact on organizations?b what management challenges do

Question transfer pricing ethics goal congruence jeremiah : question transfer pricing ethics goal congruence. jeremiah industries manufactures high-grade aluminum luggage made

Question absorption costing versus variable costing the : question absorption costing versus variable costing. the mavis company uses an absorption-costing system based on

Question 1every employer shall so far as is reasonably : question 1every employer shall so far as is reasonably practicable ensure the safety health and welfare at work of all

User Account

All Pages