What will be the balances in the balance sheet accounts

Assignment Help Financial Accounting
Reference no: EM132619688

At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $32,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $243,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $73,596.) Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:

Question 1. What will be the effect of the lease on Café Med's earnings for the first year (ignore taxes)? (Enter decreases with negative sign.)

Question 2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Café Med (ignore taxes)?

Reference no: EM132619688

Questions Cloud

What value should be used for building in jason accounting : What value should be used for the building in Jason's accounting records? Support your answer discussing the accounting principle you would use
What is the Computed weighted average shares outstanding : Average market price per share of common stock during entire year $30. What is the Computed weighted average shares outstanding
Define how did each of the presidents handle the problem : Post your response to the discussion question: Consider a topic that rises to the presidential level. How did each of the presidents (Trump, Obama, and Bush).
Define the types of marketing research : Marketing plan on newly the newly redesigned 2020 Ford Explorer to include the hybrid. Define the types of marketing research.
What will be the balances in the balance sheet accounts : What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Café Med (ignore taxes)?
Describe xpresso lube service package : 1) Describe Xpresso Lube's service package. 2) How are the distinctive characteristics of a service operation illustrated by Xpresso Lube?
What is the average market risk premium : If the average annual rate of return for common stocks is 11.7 percent, and 4.0 percent for U.S. Treasury bills, what is the average market risk premium?
Field of business in contracting and acquisition : Specifically, identify the top five (5) ethical issues confronting your field of business in contracting and acquisition.
Developing a winning total rewards system : Why does organizational culture be considered when developing a winning total rewards system aimed at talent success.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Discuss why a company would devote such inappropriate amount

Discuss why a company would devote such an inappropriate amount of its security activities to the retention of cash and the prevention of its misappropriation?

  Evaluate the unit product cost of each product

Evaluate the unit product cost of each product for the current period and Carroll Company manufactures two products, Product DRT and Product CRT.

  Accept customer order and inventory

Several fields that might appear in DSG’s “accept customer order / inventory” table are listed below. Choose those fields that should appear in the table; indicate primary and foreign keys in the usual way.

  Common stock-retained earnings-dividends-fees earned

Jardine Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Retained Earnings; Dividends; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; M..

  Do you think UPS will capitalize or expense the cost

The plan is to convert 1,500 of the company's delivery vehicles. Do you think UPS will capitalize or expense the cost of converting to electric vehicles

  What is the appropriate debt ratio

Face value of debt that trades at 90% of par. What is the appropriate debt ratio (D/(D+E)) to use for calculating Company X's weighted-average cost of capital?

  How much is balance of retained earnings in current year

Prepare a summary of information with appropriate cross referencing between sources and paraphrase and appropriately reference source material (Harvard style referencing).

  Own stock in the company

Choose companies in which you are interested. Perhaps the company has been featured in the news lately. Perhaps you own stock in the company. Perhaps you would like to own stock in the company.

  Discuss the issue of measurement and provide examples

HOLMES INSTITUTE - HA3011 Advanced Financial Accounting Assignment - Discuss the issue of measurement and provide examples

  Should the current machine be replaced

If sold now, the current machine would have a salvage value of $10,260. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years.

  Find the deferred tax amount in the first year is equal to

For computing tax, it provides 15% depreciation under Written-down-value (WDV) method. If tax rate is 30%, the deferred tax amount in the first year is equal to

  Compute taxable income and income taxes payable

Compute taxable income and income taxes payable Prepare the journal entry to record income tax expense

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!

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