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Papessa [141]
3 years ago
12

On January 1, Company A leased equipment for a six-year period. Annual lease payments are $12,000 due on December 31 of each yea

r. The payments are calculated by the lessor using a 6% discount rate. If Company A's revenues exceed a specified amount during the lease term, Company A will pay an additional $5,000 lease payment at the end of the lease. Company A estimates a 60% probability of meeting the target revenue amount. What amount should be recorded as the right-of-use asset and lease liability under the contingent rent agreement
Business
1 answer:
raketka [301]3 years ago
3 0

Answer:

Dr Right of use asset 59,007.60

    Cr Lease liability 59,007.60

Explanation:

Variable lease payments are generally not included as right of use asset or lease liability. Even though a 60% possibility exists that an additional $5,000 will be paid, they are not based on an index and are not disguised payments (only two exceptions to this rule).

Annual lease payments = $12,000

PV annuity factor, 6%, 6 periods = 4.9173

PV of lease payments = $12,000 x 4.9173 = $59,007.60

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A customer opens a short margin account by selling short 600 shares of XYZ stock at $80 per share and deposits the required marg
astra-53 [7]

Answer:

It will increase by 50%

Explanation:

Equity is given as: credit - short market value.

Find attached below table of solution

4 0
3 years ago
Splish Brothers Inc. issues $4.8 million, 5-year, 7% bonds at 102, with interest payable on January 1. The straight-line method
Radda [10]

Answer and Explanation:

The Journal entries are shown below:-

Interest expense Dr, $316,800

Premium on bonds payable Dr, $19,200 ($96,000 ÷ 5)

            To Interest payable $336,000    ($4,800,000 × 7%)

(Being interest expense and bond premium amortization is recorded)

Here we debited the interest expenses and premium on bonds as it increased the expenses and we credited the interest payable as it also increased the liabilities

5 0
3 years ago
John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.
spayn [35]

Answer:

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $34,000

       To Common stock A/c $34,000

(Being the cash is received in exchange of common stock)

2. Medical supplied A/c Dr $17,000

          To Account payable A/c $17,000

(Being the medical supplies are purchased on account)

3. Cash A/c Dr $1,600

        To Service Revenue A/c $1,600

(Being the cash is received for service performed)

4. Office Rent Expenses A/c Dr $3,000

           To Cash A/c $3,000

(Being the office rent expense is paid for cash)

5. Accounts Receivable A/c Dr $7,000

            To Service revenue A/c $7,000

(Being the service revenue is recorded)

4 0
3 years ago
If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year
MatroZZZ [7]

Answer:

D a budget deficit.

Explanation:

A budget deficit is when government spending exceeds income from taxes.

The State of Washington spent a total of $74.8 billion and had a total income of $65.8 billion. Spending exceeds income from taxes by $9 billion. The State of Washington has a budget deficit.

A budget surplus is when income from taxes exceeds government spending.

I hope my answer helps you.

8 0
3 years ago
ProTech began business at the start of the current year. The company planned to produce 40,000 units, and actual production conf
xxTIMURxx [149]

Answer:

$230,000

Explanation:

Calculation for what the company's absorption-costing income would be:

First step is to calculate the Fixed manufacturing per unit

Fixed manufacturing per unit = $240,000 ÷ 40,000

Fixed manufacturing per unit= $6

Second step is to calculate the per units cost using this formula

Per Unit cost = Sales − Variable costs − Fixed OH

Let plug in the formula

Per Unit cost = $42 − $19 − $7 − $6 = $10 × 37,000

Per Unit cost = $370,000

Now let calculate the what the company's absorption-costing income would be

Absorption-costing=$370,000 − $140,000

Absorption-costing= $230,000

Therefore the company's absorption-costing income would be:$230,000

4 0
2 years ago
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