Answer:
A. True
Explanation:
Examples of situations that individually or in combination would normally lead to a lease being classified as a finance lease are:
(a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
(b) the lessee has the option to purchase the underlying asset at a price that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception date, that the option will be exercised;
(c) the lease term is for the major part of the economic life of the underlying asset even if title is not transferred;
(d) at the inception date, the present value of the lease payments amounts to at least substantially all of the fair value of the underlying asset; and
(e) the underlying asset is of such a specialised nature that only the lessee can use it without major modifications.
Since at the time of lease the net present value of the payments is 88% of the actual market price and the useful life of the asset was 70% at the end of the lease term and also the title of asset shall not be transferred to lessee at the end of lease term, therefore the lease shall not be classify as finance lease and it shall be classified as operating lease so the answer is A. True
Answer:
C) sustainability initiative
Explanation:
Sustainability initiatives refer to activities carried out by companies in order to reduce their negative environmental impact, e.g. use of renewable energy sources, reduction in the use of paper, efficient water use, etc.
In this case, Megabrics is generating 45% of its electric power from a renewable resource (wind).
Answer:
Financial advantage of accepting the special order =$112,480
Explanation:
Unit price of the special order = (100- 16)%× $46 = $38.64
Variable cost = 15 + 6 + 3= 24
$
Sale revenue ($38.64
× 7000) = 270,480
Variable cost (24× 7,000) = (168,000
)
Cost of special machine (14,000)
Add Savings in variable selling expenses (25%*96,000) <u>24,000
</u>
Net additional income from accepting the order $112,480
Note the fixed costs are not relevant for this special order decision. Hence, they were not considered.
Financial advantage of accepting the special order =$112,480
Answer:
The options are:
A $34,850.
B $163,350.
C $128,500.
D $188,200.
$ 163,350.00,option B is correct
Explanation:
At the beginning of the current year ,the stockholders equity is the difference between total assets of $877,000 and total liabilities of $748,500 i.e $128,500
.
However,the increase or decrease to stockholders' equity in the current year is the difference between increase in total assets of $59,700 and the the increase in liabilities of $24,850 i.e $ 34,850.00
Hence stockholders' equity=the initial stockholders' equity+increase=$128,500+$ 34,850=$ 163,350.00
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