User Account

All Pages

What is type of lease from metal viewpoint

Assignment Help Financial Accounting
Reference no: EM132973119

On January 1, 2020, Metal Corp., the lessee, enters into an agreement with Plough Rentalz Inc., to lease a machine from them. Both corporations adhere to ASPE. The following data relate to the agreement:

1. The term of the non-cancellable lease is three years with no renewal option. Payments of $ 543,244 are due on December 31 of each year.

2. The fair value of the machine on January 1, 2020, is $ 1,400,000. The machine has a remaining economic life of 10 years, with no residual value. The machine reverts to the lessor upon the termination of the lease.

3. Metal depreciates all its machinery on a straight-line basis.

4. Metal's incremental borrowing rate is 10%. Metal does not have knowledge of the 8% implicit rate used by Plough.

5. Immediately after signing the lease, Plough discovers that Metal is the defendant in a lawsuit that is sufficiently material to make collectibility of future lease payments doubtful.

Problem 1: From Metal's viewpoint, what type of lease is this?

Select one:

a. finance lease.

b. manufacturer or dealer lease.

c. operating lease.

d. other finance lease.

e. Buy back lease.

Reference no: EM132973119

Questions Cloud

What pension plan may be characterized for retyred inc : Retyred makes all contributions and employees receive benefits upon retirement that are based upon the balance. This pension plan may be characterized as
Attempting to dominate a market : What are some common retail approaches that a company would typically incorporate into its business or marketing strategy? Do these approaches work for large an
What the lessee should subtract a : In calculating the amortization of a leased asset, the lessee should subtract a/an? guaranteed residual value and amortize over the life of the asset.
Compute the non-controlling interest in net income : On January 1,2020, ABC Co. acquired 70% of DEF Inc. at book value. Compute the non-controlling interest in net income of subsidiary
What is type of lease from metal viewpoint : From Metal's viewpoint, what type of lease is this? The term of the non-cancellable lease is three years with no renewal option. Payments of $ 543,244 are due.
Orthodox theology of leadership : Which aspects of the inner-focused leadership theories models of theology are best suited for inclusion in an orthodox theology of leadership? Support your reas
What is the current value of your game show prize : The prize is an annual payment of $10,000 for the rest of your life. What is the current value of your game show prize
Which a deferred tax asset exists when : Which a deferred tax asset exists when? the book basis of liabilities is greater than the tax basis of liabilities./ the book basis of assets is equal to tax.
How much is the net present value of this project : The company uses straight-line depreciation method. The income tax rate is 30%. If the required rate of return is 10%, how much is the net present value

Reviews

Write a Review

Financial Accounting Questions & Answers

  Find the entry to record the sale on the books of image

What the entry to record the sale on the books of Image should include a credit to? The shareholders' equity account balances of Image Corporation

  What factors should turner manager and her supervisor

The expansion will cost two million dollars, and is expected to increase operating earnings to $2,100,000. What factors should Turner’s manager and her supervisor, the VP of operations, consider in deciding whether to go forward with the expansion..

  Working backward-current ratio

Cass Corp.'s December 31, 2013, balance sheet reported current assets of $120,000 and current liabilities of $100,000. The current ratio increased by 25% one year later, on December 31, 2014.

  Prepare a cash flow forecast

Prepare a Cash Flow Forecast for AudioFile for the month of January 2013. Include appropriate supporting schedules.

  Compute sarasota diluted earnings per share

Compute Sarasota's 2020 diluted earnings per share. Sarasota Corporation earned net income of $400,500 in 2020 and had 108,000 shares

  Determine the income from the business

Determine the income from the business, excluding the profit on the sale of the tugboat?

  What do think are the main causes for the deficits

The United States has experienced continuous current account deficits since the early 1908s. What do you think are the main causes for the deficits?

  Calculate the financial statement ratios for cash reserve

Calculate the following financial statement ratios cash reserve ratio, return ratio, net operating ratio, debt ratio, and the program expense

  How many shares of stock would the partners receive

The capital stock of the corporation will have a par value of P100. Upon incorporation, how many shares of stock would the partners receive?

  Prepare the balance sheet after Aji has been introduced

It is agreed that goodwill is worth £72,000 and that it is to be brought into the business records. Prepare the balance sheet after Aji has been introduced

  How much did the company collected on its sales on account

Ericka Co. had just recently released its Financial Statement. Its Statement of Financial Performance shows a Sales of P2,415,000 while its Statement.

  Calculate market price of the bond

Jim bought a $1000, 6% Boeing Aircraft bond on January 1, 2002, with a maturity date of Dec 31st 2006. Equivalent bonds were also yielding 6%. Calculate market price of the bond (5 years' interest, paid semi-annually).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd