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Metro Industries manufacture s equipment for sale or lease. Federated Corp (lessee) leased a tooling machine from Metro Industries (lessor) on 12/31/2010, for a four-year period ending December 31, 2014. On 12/31/2014, the equipment will revert back to the lessor. The equipment has a fair value or "selling price" of $128,872 and it costs the lessor $90,000. The lease agreement specified annual payments (note: you need to figure out the annual payment with the given info) to be paid with the first payment at the inception of the lease, and each December 31 through 2013. The machine's useful life is five years. The residual value at the end of 12/31/2014 is expected to be $35,000. The lessee does guarantee the residual value. The lessee has incremental borrowing rate of 14% and is aware of the lessor's implicit rate of return of 12%. Assume the fair value of the equipment at the end of lease term (12/31/2014) will be $10,000. Do the followings:
1) Show how the lessor determines the lease payment;2) What is the minimum lease payments for both lessee and lessor;3) Prepare the appropriate entries for both the lessee and the lessor from the inception of the lease through the return of the equipment back to the lessor.
Assume that the risk-free rate is 6 percent and the expected return on the market is 13 percent. What is the required rate of return on a stock that has a beta of 1.2?
Celia and Amos, who are married filing jointly, have one dependent and do not itemized deductions. They have taxable income of $82,000 and tax preferences of $53,000 in 2010. What is their AMT base for 2010?
Frogger Company uses a job order cost accounting system. On January 1, $15,000 of direct materials and $3,500 of indirect materials were requisitioned for production. Prepare the general journal entry to record this requisition.
Variable costs for Foley, Inc. are 25% of sales. Its selling price is $80 per unit. If Foley sells one unit more than break-even units, how much will profit increase?
Design a proposal for the appropriate controls to cover accounts receivable. The proposal must be based on the Apollo Shoes case. Your reading of the Apollo Shoes case should include board minutes and auditor messages and notes.
Britney is beneficiary of an $150,000 insurance policy on her father's life. Upon his death, she may elect to receive the proceeds in five yearly installments of $32,000 or may take the $150 lump sum. She elects to take the lump sum payment. What ..
Canyon Escape sells individual tickets for $75 for walking tours of the Grand Canyon. Unit-level cost, including lunch, are $15 per ticket; fixed cost total $200,000 per year
Conduct literature and internet research of sole proprietorships, partnerships, and corporations. Discuss the three business forms in terms of how they are formed, managed, and how they operate as business entities.
The individual stores in the Mark Goodwin convenience chain prepare two copies of goods requisition form (GRF) when they need to order merchandise from the central warehouse.
Guagliano Corporation produces and sells a single product whose selling price is $110.00 per unit and whose variable expense is $29.70 per unit. The company's monthly fixed expense is $345,290.
When using classical variables sampling for estimation, an auditor normally evaluates the sampling results by calculating the possible misstatement in either direction. This statistical concept is known as
The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations, and cash flows is applied within the framework of :
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