What amount should be recognized as interest income for 2019? 194,160 154,160 172,400 128,000 What amount gross income should be recognized by the entity for 2019? 555,000
Q: Alvis Corporation reports pretax accounting income of $260,000, but due to a single temporary…
A: Explanation of ConceptDeferred Tax Assets / Deferred tax Liability : are to be calculated when there…
Q: Listed below are several transactions that took place during the first two years of operations for…
A: Income Statement :— It is one of the financial statement that shows profitability, total revenue and…
Q: Sales COGS Gross Profit elect one: O 2017 1,000,000 300,000 A O O revenue is used as the base-figure…
A: The Vertical analysis mainly refers to the method in which each and every item is recorded as the…
Q: Eliminating Entries, Goodwill Polaris Company acquires all of the stock of SSC, Inc. for $60 million…
A: Elimination journal entries are used in accounting to eliminate inter company transactions between…
Q: 32 Xavier bought his chicken farm property for $60,000. When he retired, he sold the property to his…
A: ACB is particularly relevant in the context of capital gains taxes. The ACB is important because it…
Q: Abe Manufacturing Corp. decided to expand further by purchasing the net assets of ERB Manufacturing…
A: Goodwill is the difference between consideration paid and net assets at fair value.
Q: 5. Zakat on Plants & Fruits 1. Wheat crop during the season was 5000 kg 2. Agricultural costs 6000…
A: Zakat is a thing which is given by the Muslims. It is an obligatory thing which all muslims have to…
Q: Nigel McCloskey i
A: South Carolina's Overtime Minimum WageOvertime pay, also called "time and a half pay", is one and a…
Q: Numbers 11-12 (Based on Book Values with Adjustments) On July 1, AA and BB decided to form a…
A: The Capital Balance of the partner as appearing in the books adjusted with all types of adjustments…
Q: Listed below are selected transactions of Lychee’s Department Store for the current year ending…
A: "Total liabilities" is the total of all financial commitments (debts and cash outlays) owing by an…
Q: . Why is cost accumulation easier with a process costing system compared with a job costing system?…
A: Small firms sometimes struggle to pay costs and turn a profit, so they must appropriately price…
Q: Kopo manufactures calculators. The information below pertains to April, its first month of…
A: In management accounting the phrases "over-absorbed overhead" and "under-absorbed overhead" are…
Q: These six documents must be processed to bring the accounting records up to date. $ 4,700 direct…
A: The journal entries are prepared to record the transactions on regular basis. The direct costs are…
Q: This is incorrect, the following are the multiple choice options: a. 25.29% b. 8.62% c. 51.72% d.…
A: Accounting rate of return is a financial ratio used in capital budgeting to calculate the return…
Q: What is the effect to stockholders' equity as a result of the share split in item c? What is the…
A: Stockholders' equity includes the capital contributed by the shareholders and the amount of profit…
Q: Lihue, Inc., applies fixed overhead at the rate of $2.20 per unit. Budgeted fixed overhead was…
A: Cost controlling is very important for an entity, the entity uses standard costing to control costs…
Q: On October 1, 2024, a company purchased a piece of land by agreeing to pay the seller $450,000 in…
A: The notion of present value has applications in the fields of finance, economics, and investment…
Q: Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL…
A: Ratio analysis is a measure of relationship between two financial figures. It helps in comparison…
Q: Navaria Inc. manufactures and sells chair lift mobility aids. These are chairlift systems designed…
A: INCOME STATEMENTIncome Statement is one of the Important Financial Statement of the Company. Income…
Q: HELP WITH CORRECT ANSWER AND WORKING Schedule of Activity CostsQuality Control…
A: Activity cost refers to the total cost that is incurred for the entire production process and the…
Q: Required information [The following information applies to the questions displayed below.] The…
A: FIFO is one of the method used in process costing. FIFO means first in first out costing under which…
Q: A company applies overhead using machine hours. Additional information follows. Standard variable…
A: The variance is the difference between the actual and standard production data. The variance can be…
Q: Personal Budget At the beginning of the school year, Katherine Malloy decided to prepare a cash…
A: A cash budget is an estimate of a corporation's cash flows for a given time span. A cash budget is…
Q: Presented below is income statement and dividend information of the Nebraska Corporation for the…
A: A closing journal entry, in accounting, is a set of journal entries made at the end of an accounting…
Q: B. Co an importer of merchandise for local sales had the following data on the importation: Invoice…
A: VAT is a levy on products and services imposed at each level of the process when value is added,…
Q: Tost borrow from a famous advertising campaign, "Sport Clips is not your father's barber shop!"…
A: Assets are resources owned by a business or an individual that have economic value and are expected…
Q: Required: Assuming an income tax rate of 25% and 2024 income tax payable of $910,000, prepare the…
A: The income tax payable represents the tax obligation of the taxpayer. It is the amount a taxpayer is…
Q: Frank Peterson owes $25,000 on a 6%, 180 day note. On day 15, he pays $6300 on the note. On day 50,…
A: According to the question,ParticularsValuesOwed amount $25,000.00Interest rate6.00%Term to…
Q: During the last 6 weeks, the actual costs of labor for Solsana Company were as follows: Week 1 Week…
A: The given information pertains to the actual costs of labor for Solsana Company over a span of 6…
Q: 1. Issued 30,000 shares of no-par common stock in exchange for $300,000 in cash. 2. Purchased…
A: The accounting equation is a fundamental concept in accounting that shows the relationship between a…
Q: Nancy's Cabinet Design established a petty cash fund on April 1, 2024, to facilitate the payment of…
A: Lets understand the basics.The journal entry typically includes the date of the transaction, a…
Q: Question 2 Lea Corp. declared $35,000 in dividends in 2024. Share capital consists of 1,100 common…
A: The dividend is a method of distributing profits among shareholders. Shareholders have the…
Q: LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 2023 2022…
A: Asset turnover ratio :— It is the ratio between net sales and average total assets. It is…
Q: Problem 3: EL Co. reported net income for the current year 2021 at P560,000 before provision of…
A: Income taxes means obligations or taxes needs to be paid on total income earned by the business.…
Q: A company budgets production of 4,720 units in May and 6,025 units in June. Each unit requires 4…
A: MATERIAL PURCHASE BUDGETMaterials Budget is the budget that includes quantities of direct materials…
Q: Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective…
A: Since the MACRS recovery is 5 years the depreciation rates will be seen in the MACRS table which are…
Q: Valerie Vamp as an individual provides personal service and obtains commission as a designer of…
A: It is the amount of reduction in the value of a tangible fixed asset due to tear and wear,…
Q: The following information is made available involving the defined benefit pension plan of Princess…
A: A company's commitment to pay future pension payments to its employees is represented by the sum…
Q: June Sept. 30 Issued 10,000 Instructions a) b) Record the transactions. Calculate the number and…
A: Common shares, commonly referred to as common stock, signify ownership in a company and give…
Q: On May 1, year 1, Anna received 6,700 shares of restricted stock from her employer, Jarbal…
A: Section 83(b) Election:If the taxpayers allow the tax collection on restricted stock, the tax…
Q: 2-3. A, resident alien, has the following income within and without the Philippines for 2018: Within…
A: Income tax is based on income. Suppose a person has salary income, capital gain income, house rent…
Q: Mary and Carol each contribute $50,000 to their newly formed general partnership (each partner is…
A: It is the amount of reduction in the value of a tangible fixed asset due to tear and wear,…
Q: P 16-1 Partnership income allocation—Statement of partnership capital Ell, Far, and Gar are…
A: A successful partnership may provide the partners with a number of benefits, such as the sharing of…
Q: Wright Co., organized on January 2, 2021, had pretax accounting income of $960,000 and taxable…
A: Balance sheet is the financial statement that reports the financial position of an entity during a…
Q: Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a…
A: A trial balance is a statement that lists the balances of all general ledger accounts in a…
Q: Using the perpetual inventory method and the information provided, what is the weighted-average cost…
A: SolutionIt is a weighted average cost method.In this metod, the cost of goods avialable for sale is…
Q: What are equivalent units? Why are they needed with a process costing system?
A: Process costing is the process of allocating the costs to products based on the production process.…
Q: 9.Tito Company entered into an assignment arrangement with Easy Bank whereby the assignee would…
A: A "note payable" is an obligation that constitutes a formal written promise to return a certain sum…
Q: The adjusted trial balance for China Tea Company at December 31, 2024, is presented below: Debit…
A: The journal entries are prepared to record the transactions on regular basis. The closing entries…
Q: Zenon Incorporated has the following taxable income: $ 1,990,000 240,000 $ 2,140,000 U.S: source…
A: Answer:- Income tax meaning:- Income tax is that tax which is imposed by the government on the…
An entity is a manufacturer of machinery. It uses lease agreements to sell its product. On January 1, 2019, the entity leased a machine to another entity under the following terms: • The lease term is 5 years. • The annual rental is P500,000 payable every January 1, 2019. • The machine has a cost to the entity of P1,600,000. • Implicit interest rate in the lease, known to the lessee, is 8%. The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.21 respectively.
What amount should be recognized as interest income for 2019?
194,160
154,160
172,400
128,000
What amount gross income should be recognized by the entity for 2019?
555,000
827,000
955,000
700,000
Step by step
Solved in 3 steps with 5 images
- Comprehensive Landlord Company and Tenant Company enter into a noncancelable, direct financing lease on January 1, 2019, for nonspecialized equipment that cost the Landlord 280,000 (useful life is 6 years with no residual value). The fair value of the equipment is 300,000. The interest rate implicit in the lease is 14%. The 6-year lease requires 6 equal annual amounts payable each January 1, beginning with January 1, 2019. Tenant pays all executory costs directly to a third party on December 1 of each year. The equipment reverts to the lessor at the termination of the lease. Assume that there are no initial direct costs. Landlord expects to collect all rental payments. Required: 1. Next Level (a) Show how landlord should compute the annual rental amounts, (b) Discuss how the Tenant Company should compute the present value of the lease payments. What additional information would be required to make this computation? 2. Next Level Prepare a table summarizing the lease and interest receipts that would be suitable for Landlord. Under what conditions would this table be suitable for Tenant? 3. Assuming that the table prepared in Requirement 2 is suitable for both the lessee and the lessor, prepare the journal entries for both firms for the years 2019 and 2020. Use the straight-line depreciation method for the leased equipment. The executory costs paid by the lessee are in 2019: insurance, 700 and property taxes, 800; in 2020: insurance, 600 and property taxes, 750. 4. Next Level Show the items and amounts that would be reported on the comparative 2019 and 2020 income statements and ending balance sheets for both the lessor and the lessee, using the change in present value approach.Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.An entity is a manufacturer of machinery. It uses lease agreements to sell its product. On January 1, 2019, the entity leased a machine to another entity under the following terms: • The lease term is 5 years. • The annual rental is P500,000 payable every January 1, 2019. • The machine has a cost to the entity of P1,600,000. • Implicit interest rate in the lease, known to the lessee, is 8%. The machine reverts back to the entity at the end of 5 years with an unguaranteed residual value of P400,000. The present value factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.21 respectively. What amount of sales revenue should be recognized by the entity?
- An entity is a manufacturer of machinery, It uses lease agreements to sell its product, On January 1, 2019, the entity leased a machine to another entity under the following terms: The lease term is 5 years. The annual rental is P500,000 payable every January 1, 2019. The machine has a cost to the entity of P1,600,000. Implicit interest rate in the lease, known to the lessee, is 8%. The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.21 respectively, What amount gross income should be recognized by the entity for 2019?An entity is a manufacturer of machinery. It uses lease agreements to sell its product, On January 1, 2019, the entity leased a machine to another entity under the following terms: The lease term is 5 years, The annual rental is P500,000 payable every January 1, 2019. The machine has a cost to the entity of P1,600,000. Implicit interest rate in the lease, known to the lessee, is 8%. The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.21 respectively. What amount should be recognized as interest income for 2019?An entity is a manufacturer of machinery, It uses lease agreements to sell its product, On January 1, 2019, the entity leased a machine to another entity under the following terms: The lease term is 5 years. The annual rental is P500,000 payable every January 1, 2019. The machine has a cost to the entity of P1,600,000. Implicit interest rate in the lease, known to the lessee, is 8%. The machine reverts back to the entity at the end of 5 years with unguaranteed residual value of P400,000. The present value factors of 1 and annuity due at 8% for 5 periods are 0.68 and 4.21 respectively, What amount of sales revenue should be recognized by the entity?
- 11. What amount of gross income should be recognized by the entity for 2020? a. P555,000 b. P827,000 c. P955,000 d. P700,000 12. What amount should be recognized as interest income for 2020? a. P194,160 b. P154,160 c. P172,400 d. P128,000Happy Company uses lease as a means of selling its equipment. On July 1, 2021, the company leased a piece of equipment to Great Company. The cost of the equipment to Happy Company was P684,000. The fair market value (which was the sales price) was P792,200 at the time of the inception of the lease. Annual lease payments are P135,000 and are payable in advance for 8 years. The equipment has an expected economic life of 10 years. At the end of the lease term, the title to the equipment will pass to Great Company. Implicit interest rate is 10%. What is the manufacturer’s profit recognized by Happy Company in 2021?ABC Company uses lease as a means of selling its equipment. On July 1,2019, the company leased an equipment to DEF Company. The cost of the equipment to ABC Company was P 684,000. The fair market value ( which was the sales price) was P 792,236.54 at the time of the inception of the lease. Annual lease payments are P 135,000 and are payable in advance for 8 years. The equipment has an expected economic life of 10 years. At the end of the lease term , title to the equipment will pass to DEF Company. Implicit interest rate is 10%. required: (D)What is the manufacturer's profit recognized by ABC Company? (E)Assume that at the end of the lease term, the title to the equipment will not pass to the lessee. The lessee however, guarantees a residual value of P 50,000 at the end of the lease term. How much is the cost of goods sold recognized by ABC Company pertaining to the lease? (F)What is the ABC Company's total financial revenue pertaining to the lease?
- Assume that on January 1, 2019, JK Restaurants sells a computer system to High Finance Company for P510, 000 and immediately leases the computer system back. The relevant information is as follows: The computer was carried at JK’s books at a value of P450, 000. The term of the noncancelable lease is 10 years. Title will transfer to JK. The lease agreement requires equal rental payments of P83, 000.11 at the end of each year. The incremental borrowing rate for Elmer is at 12%. Elmer is aware that High Finance Co., set the annual rental to ensure a rate of return of 10% The computer has a fair value of P680, 000 on January 1, 2019, and an estimated economic life of 10 years. Elmer pays executory costs of P9, 000 a year. Instructions: Prepare the journal entries for both the lessee and the lessor for 2019 to reflect the sale-leaseback agreement. No uncertainties exist, and collectability is reasonably certain.Assume that on January 1, 2019, JK Restaurants sells a computer system to High Finance Company for P510, 000 and immediately leases the computer system back. The relevant information is as follows:1. The computer was carried at JK’s books at a value of P450, 000.2. The term of the noncancelable lease is 10 years. Title will transfer to JK.3. The lease agreement requires equal rental payments of P83, 000.11 at the end of each year.4. The incremental borrowing rate for Elmer is at 12%. Elmer is aware that High Finance Co., set the annual rental to ensure a rate of return of 10%5. The computer has a fair value of P680, 000 on January 1, 2019, and an estimated economic life of 10 years.6. Elmer pays executory costs of P9, 000 a year.Instructions:Prepare the journal entries for both the lessee and the lessor for 2019 to reflect the sale-leaseback agreement. No uncertainties exist, and collectability is reasonably certain.Rich Company uses lease as a means of selling its equipment. On July 1,2019, the company leased an equipment to Poor Company. The cost of the equipment to Rich Company was P 684,000. The fair market value ( which was the sales price) was P 792,236.54 at the time of the inception of the lease. Annual lease payments are P 135,000 and are payable in advance for 8 years. The equipment has an expected economic life of 10 years. At the end of the lease term , title to the equipment will pass to Poor Company. Implicit interest rate is 10%. What is the rich Company's total financial revenue pertaining to the lease?