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Maurinko [17]
3 years ago
12

At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a nine-year operating lease agre

ement. The contract calls for quarterly rent payments of $39,000 each. The office building was acquired by Lakeside at a cost of $3.4 million and was expected to have a useful life of 25 years with no residual value. What will be the effect of the lease on LTT’s earnings for the first year (ignore taxes)?LTT reduces it's earnings by $_______At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a eleven-year operating lease agreement. The contract calls for quarterly rent payments of $41,000 each. The office building was acquired by Lakeside at a cost of $3.6 million and was expected to have a useful life of 30 years with no residual value.What will be the effect of the lease on Lakeside’s earnings for the first year (ignore taxes)?Lakeside Increases it's earnings by _________A lease agreement calls for quarterly lease payments of $7,000 over a 10-year lease term, with the first payment at July 1, the lease’s inception. The interest rate is 12%. Both the fair value and the cost of the asset to the lessor are $167,000.What would be the amount of interest expense the lessee would record in conjunction with the second quarterly payment at October 1?Lease Decrease in Outstanding Payment Interest Decrease in Date July 1 July 1 October 1 balance balanceWhat would be the amount of interest revenue the lessor would record in conjunction with the second quarterly payment at October 1?
Business
1 answer:
ziro4ka [17]3 years ago
4 0

Answer:

a.Lakeside's earnings will reduce  by $156,000

b. Lakeside's earnings will increase by $20,000.

Explanation:

The rental fee payment per quarter =$39,000.

The rental fee payment per year = $39,000 x 4 = $156,000

In this case, none of the classification criteria of a capital lease is met. Hence, the lease will be recorded as an operating lease and all the four quarterly payments will be recorded as rent expense by LLT. This will reduce LTT's earnings by $156,000.

Lakeside will record all the payments received from LTT as rent revenue since it is an operating lease. Also, because Lakeside is the owner of the asset, she will record depreciation on the asset too.

Thus,

Increase in lakeside's earnings = Rent revenue - Depreciation expense.

Rent revenue = $156,000

Depreciation expense = $3,400,000 / 25 = $136,000

Thus,

Lakeside's earnings will increase by $20,000 (that is , $156,000 - $136,000).

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Describe the steps involved in closing the books. What’s is the most important output of the accounting cycle? What would happen
yuradex [85]

The steps involved in closing the books are as follows:

Closing the Revenues

Closing the Expenses

Closing the net income

Closing the dividend and withdrawals


The most important output of the accounting cycle is the financial statement like balance sheet and Income statement. If the books were never closed, then the business would never be able to know the financial position for a particular accounting period.  


8 0
3 years ago
Suppose a State of Nevada bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, h
spayn [35]

Answer:

$651.60

Explanation:

the worth of the bond today can be determined by calculating the present value of the bond's cash flow

Present value is the sum of discounted cash flows

Present value = cash flow / (1 + r)^n

r = interest rate

n = years

1000 / ( 1.055)^8 = $651.60

8 0
2 years ago
Bonds are basically also known as what?
Karo-lina-s [1.5K]

bonds are basically known as

b)contracts

8 0
2 years ago
Villalpando Winery wants to raise ​$35 million from the sale of preferred stock. If the winery wants to sell one million shares
statuscvo [17]

Answer:

(a) $4.2

(b) $5.6

(c) $2.8

(d) $2.45

(e) $2.1

(f) $1.05

Explanation:

Given that,

Total amount of capital raised from the sale of preferred stock = $35 million

Number of shares = 1 million

Price per share = Total capital raised ÷ Number of shares

                          =  $35 million ÷ 1 million

                          = $35 per share

(a) If a Expected rate of return = 12 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.12

                            = $4.2

(b) If a Expected rate of return = 16 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.16

                            = $5.6

(c) If a Expected rate of return = 8 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.08

                            = $2.8

(d) If a Expected rate of return = 7 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.07

                            = $2.45

(e) If a Expected rate of return = 6 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.06

                            = $2.1

(f) If a Expected rate of return = 3 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.03

                            = $1.05

8 0
2 years ago
When the central bank acts in a way that causes the money supply to increase while aggregate demand remains unchanged, it is:?
Rudik [331]

Answer:

It is "following an expansionary monetary policy".

Explanation:

When the central bank uses expansionary monetary policy, money supply increases and the  interest rates decreases, this will lead to no change in aggregate demand. It also affects the value of the currency and that is lowering its value but there is improvement in growth of domestic economy.

5 0
3 years ago
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