Long Beach, Inc., a lessor, charges Applewood Corp., a lessee, a $10,500 nonrefundable fee to enter into a five-year operating l
ease. The lease is effective on January 1, 2016. It provides for monthly rental of $2,400. In Applewood's income statement for the year ended June 30, 2016, rent expense should be
(A note in the financial statements or a schedule attached to the statement of cash flows.
Explanation:
Noncash investing and financing transactions do appear as a separate schedule on the statement of cash flows. They are are notable investing and financing activities that do not affect cash directly. The IFRS and US GAAP mandates companies to disclose all notable or significant non-cash investing and financing activities either at the bottom of the statement of cash flows usually in a form of a footnote or in the notes to the financial statements.
The computation of the number of units started during November in the department is shown below:-
Number of units started during November in the department = units completed and transferred out + units in the ending work in process inventory - units in the Beginning work in process inventory
