1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
natima [27]
3 years ago
15

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

eement. The contract calls for quarterly rent payments of $29,000 each. The office building was acquired by Lakeside at a cost of $2.4 million and was expected to have a useful life of 30 years with no residual value.
Required:
a. What will be the effect of the lease on Lakeside’s earnings for the first year (ignore taxes)? (Enter your answer in whole dollars.)
Business
1 answer:
telo118 [61]3 years ago
5 0

Answer:

The effect of the lease on Lakeside's earnings in the first year of lease is an increase in net earnings of $36000

Explanation:

The effect of the lease on Lakeside's earnings is in terms of costs/benefits.

Costs incurred yearly as a result of acquiring the office space by a way of depreciation charge while benefits relate to the yearly lease rentals.

Yearly lease rentals ($29000*4)       =$116000

Yearly depreciation($2400000/30)  =<u>($80000)</u>

Increase in earnings                               <u> $36000</u>

The fact that net earnings would increase shows that the acquiring the office space and subsequently leasing it out to a lesse were not worthwhile.

You might be interested in
Perine, Inc., has balance sheet equity of $5.4 million. At the same time, the income statement shows net income of $783,000. The
S_A_V [24]

Answer:

The target stock price in one year is $149.93

Explanation:

Fly Away, Inc., has

Balance sheet equity of (E) = $ 5,400,000

Also, the income statement shows net income of (NI) = $783,000.

The company paid dividends of (D) = $438,480

Shares of stock outstanding (N) = 100,000

Benchmark PE ratio = 18

Question = what is the target stock price in one year?

We need the expected EPS at the end of next year and not this year.

EPS this year, E₀ = NI / N

                            = 783,000 / 100,000

                            = $ 7.83

Retention Ratio, "R" = 1 - Dividend payout ratio = 1 - D/NI

                                 = 1 - 438,480 / 783,000

                                 = 1 - 56.00%

                                 = 44.00%

Return on equity, ROE = NI / E

                                     = 783,000 / 5,400,000

                                     = 14.50%

Growth rate in earnings, g = R x ROE

                                         = 44.00% x 14.50%

                                         = 6.38%

Hence, expected EPS next year, E₁ = E₀ x (1 + g)

= $ 7.83 x (1 + 6.38%)

= $ 8.33

Hence, target price next year, P = Benchmark PE ratio x E₁

                                                     = 18 x $8.33

                                                     = $149.93

The target stock price in one year = $149.93

4 0
3 years ago
Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further, suppo
Mekhanik [1.2K]

Answer:

d. All of the above are correct.

Explanation:

a. This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity.

b. The price paid by buyers is $0.30 per drink more than it was before the tax.

This is true as the difference between $0.50 and $0.20 is $0.30. The price paid by buyers is indeed $0.30 per drink more than it was before the tax.

c. Forty percent of the burden of the tax falls on the sellers.

This is true as $0.20 of $0.50 is 40% and this tax burden falls on the sellers.

8 0
3 years ago
All over-the-counter receipts are entered in cash registers.
Anna71 [15]

Answer:

(a) Physical controls

(b) Human resource controls

(c) Independent internal verification

(d) Segregation of duties

(e) Establishment of responsibility

Explanation:

(a) All over-the-counter receipts are entered in cash registers. That is an example of the physical controls principle.

(b) All cashiers are bonded. That is an example of the human resource controls principle.

(c) Daily cash counts are made by cashier department supervisors. That is an example of the independent internal verification principle.

(d) The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals. That is an example of the segregation of duties principle.

(e) Only cashiers may operate cash registers. That is an example of the establishment of responsibility principle.

4 0
3 years ago
Read 2 more answers
Halliford Corporation expects to have earnings this coming year of $3/share. Halliford plans to retain all of its earnings for t
jeka57 [31]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

6 0
3 years ago
The current asset section of Stibbe Pharmaceutical Company’s balance sheet included cash of $34,000 and accounts receivable of $
Alexxandr [17]

Answer:

Ending balance in inventory= $22,000

Current liabilities= $88,000

Explanation:

The current assets section of stibblr pharmaceutical company included cash of $34,000 and accounts receivables of $54,000

The company's current ratio is 2.5

The acid test ratio is 2.0

Acid test ratio = cash + account receivables /current liabilities

2.0= ($34,000+$54,000)/current liabilities

2.0= 88,000/current liabilities

Current liabilities = 88,000/2

= $44,000

Current ratio= cash + account account receivables + inventory /current liabilities

2.5= $34,000+$54,000 + inventory/$44,000

2.5= $88,000+Inventory /44,000

2.5×44,000= 88,000 + inventory

110,000= 88,000 + Inventory

Inventory = $110,000-88,000

= $22,000

Hence the current liabilities is $88,000 and inventory is $22,000

3 0
3 years ago
Other questions:
  • How often should you visit your site and have others visit it for you to find out if everything is working as it should? A.Every
    5·2 answers
  • A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following:
    13·1 answer
  • John, 45 years old and unmarried, contributed $1,000 monthly in 2018 to the support of his parents' household. The parents lived
    9·1 answer
  • When a corporation has both preferred and common stock outstanding, earnings per share is computed by dividing net income
    13·1 answer
  • "Jim was called to active duty in the military. Knowing that he would be out of the country for a year or more, he gave his sist
    11·2 answers
  • Bay Manufacturing Co. purchased a 3-month U.S. Treasury bill. In preparing Bay's statement of cash flows, this purchase would:A.
    15·1 answer
  • if an interest inventory reveals that you are highly interested in solitary, introverted work, what might be the best type of ca
    8·1 answer
  • Arnell Industries has $35 million in permanent debt outstanding. The firm will pay interest only on this debt. Arnell’s marginal
    15·1 answer
  • g Romans sells the Regular blend for $3.60 per pound and the DeCaf blend for $4.40 per pound. Romans would like to place an orde
    15·1 answer
  • Fundamentally, economics deals with:______.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!