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MakcuM [25]
3 years ago
8

Nichols Fruits leased farm equipment from King Machinery on January 1, 2021. The present value of the lease payments discounted

at 10% was $40 million. Ten annual lease payments of $6 million are due at the beginning of each year beginning January 1, 2021. King had constructed the equipment recently for $33 million. With this lease agreement, control is considered to be transferred to the lessee at the beginning of the lease. What amount of selling profit did King record at the beginning of the lease
Business
1 answer:
Yanka [14]3 years ago
5 0

Answer:

$7 million

Explanation:

Nichols Fruits

The present value of the lease payments discounted at 10% was $40 million.

King had constructed the equipment recently for $33 million.

Hence:

Interest revenue = [$40 - $33 million])

= $ 7 million

Therefore the amount of selling profit that King record at the beginning of the lease is $ 7 million

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The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Acco
OLEGan [10]

Answer:

Lightning Inc.

Computation of Bad Debts Expense:

7% of $7,500 =   $525

21% of $1,600 =    336

46% of $1,300 =   598

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Explanation:

a) Data and Calculations:

Credit Sales $ 20,000

Accounts Payable 10,000

Accounts Receivable 10,400

Allowance for Uncollectible Accounts 400 credit

Cash Sales 20,000

Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 21% of receivables up to 30 days past due, and 46% of receivables greater than 30 days past due.

The accounts receivable balance of $10,400 consists of $7,500 not yet due, $1,600 up to 30 days past due, and $1,300 greater than 30 days past due.

Age Analysis of Accounts Receivable balance of $10,400

                  Not yet due     up to 30 days         greater than 30

                                               past due              days past due

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Balance           $7,500                  $1,600               $1,300

Bad debts          $525                     $336                 $598

Bad debts Expense = $1,459            

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Answer:

there is gain and  receive is $100 long term gain

Explanation:

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time = 16 year ago

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amount and character of his recognized gain or loss in the current year

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and

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