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VMariaS [17]
3 years ago
14

Torrey Co. manufactures equipment that is sold or leased. On December 31, 2021, Torrey leased equipment to Dalton for a five-yea

r period ending December 31, 2026, at which date ownership of the leased asset will be transferred to Dalton. Equal payments under the lease are $1,400,000 (including $100,000 executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2021. Collectibility of the remaining lease payments is reasonably assured, and Torrey has no material cost uncertainties. The normal sales price of the equipment is $3,850,000, and cost is $3,000,000. For the year ended December 31, 2021, what amount of income should Torrey realize from the lease transaction
Business
1 answer:
topjm [15]3 years ago
5 0

Answer:

$850,000

Explanation:

The computation of Amount of income should Torrey realize from the lease transaction is shown below:-

Amount of income should Torrey realize from the lease transaction = Sale price - Cost

= $3,850,000 - $3,000,000

= $850,000

Therefore for computing the amount of income should Torrey realize from the lease transaction we simply deduct the cost from sales price.

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Upon beginning her career at davidson inc., a small consulting firm, stephanie benjamin receives a copy of the firm's organizati
7nadin3 [17]
Upon beginning her career at Davidson inc., a small consulting firm, Stephanie Benjamin receives a copy of the firm's organization chart, which will clarify positions and reporting relationships within the firm. Correct answer: B
<span> The organization chart illustrates the relationships among positions within an organization . The chart has usual five elements: job design, departmentalization, delegation, span of management, and chain of command.</span>
6 0
3 years ago
Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio of creamer to coffee. H
diamong [38]

Answer:

a. Robert's optimal consumption bundle contains <u>9.18</u> cups of coffee and <u>45.88</u> packets of creamer.

b. Zero packets of creamer is the substitution effect.

Explanation:

a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________

The consumption ratio can be stated as follows:

5 Creamer = 1 cup of coffee

Budget line has an equation can also be given as follows:

B = (Pm * Qm) + (Pf * Qf) ...................... (1)

Where;

B = Budget = The amount Robert has to spend on coffee and creamer = $39.00

Pm = Price of creamer = $0.25

Qm = Quantity of creamer = ?

Pf = Price of coffee = $3.00

Qf = Quantity of coffee = ?

39 = (0.25 * Qm) + (3 * Qf)

39 = 0.25Qm + 3Qf

Since "5 Creamer = 1 cup of coffee". This also implies thal 1 creamer = 1 / 5 cup of coffee. Therefore, we have;

39 = 0.25Qm + (3 * 1/5 * Qm)

39 = 0.25Qm + (3/5)Qm

39 = 0.25Qm + 0.60Qm

39 = 0.85Qm

Qm = 39 / 0.85

Qm = 45.88

Qf = 45 / 5 = 9.18

Therefore, Robert's optimal consumption bundle contains <u>9.18</u> cups of coffee and <u>45.88</u> packets of creamer.

b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?

Since Robert treats coffee and creamer as perfect complements, this implies that there there is nothing like substitution effect under this condition.

Therefore, zero packets of creamer is the substitution effect.

6 0
3 years ago
L Corporation produces and sells 15,300 units of Product X each month. The selling price of Product X is $23 per unit, and varia
Arlecino [84]

Answer:

<em><u>It would generate a financial disadvantage for 62,800</u></em>

Explanation:

\left[\begin{array}{cccc}-&continued&discontinued&differential\\Sales&351,900&0&-351,900\\Variable&-260,100&0&260,100\\Contribution&91,800&0&-91,800\\Fixed&-103,000&-74,000&29,000\\total&-11,200&-74,000&-62,800\\\end{array}\right]

It would generate a financial disadvantage for 62,800

Because the product, while is having a loss, their contribution cover is enought to cover at least the avoidable fixed cost.

5 0
3 years ago
Department A had a beginning inventory balance of 25 units which were 40% complete. During the accounting period, the department
GarryVolchara [31]

Answer:

the equivalent units of production is 250 units

Explanation:

The computation of the equivalent units of production is units under FIFO method is shown below:

= Opening inventory balance in units + additional units - ending inventory balance units

= 25 units + 275 units - 50 units

= 250 units

hence, the equivalent units of production is 250 units

We simply applied the above formula so that the correct value could come

And, the same is to be considered

5 0
3 years ago
The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs abov
Ne4ueva [31]

Answer:

The correct option is d. Increase by $19,500.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Pluto Incorporated provided the following information regarding its single product:

Direct materials used = $240,000

Direct labor incurred = $420,000

Variable manufacturing overhead = $160,000

Fixed manufacturing overhead = $100,000

Variable selling and administrative expenses = $60,000

Fixed selling and administrative expenses = $20,000

The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level). The company has excess capacity and regular sales will not be affected by this special order. There was no beginning inventory.

What would be the effect on operating income of accepting a special order for 1,000 units at a sale price of $40 per product? Note: The special order units would not require any variable selling and administrative expenses.

a. Decrease by $19,500

b. Decrease by $18,000

c. Increase by $18,000

d. Increase by $19,500

The explanation of the answer is now provided as follows:

We first calculate the expected total relevant cost of the special order as follows:

Direct materials cost per unit = Direct materials used / Annual units = $240,000 / 40,000 = $6.00

Direct labor cost per unit = Direct labor incurred / Annual units = $420,000 / 40,000 = $10.50

Variable manufacturing overhead per unit = Variable manufacturing overhead / Annual units = $160,000 / 40,000 = $4.00

Expected special order total relevant cost = (Direct materials cost per unit + Direct labor cost per unit + Variable manufacturing overhead per unit) * Special order units = ($6.00 + $10.50 + $4.00) * 1,000 = $20.50 * 1,000 = $20,500

Expected revenue from the special order = Special order units * Special order selling price per unit = 1,000 * $40 = $40,000

Expected profit from the special order = Expected revenue from the special order - Expected special order total relevant cost = $40,000 - $20,500 = $19,500

Since the expected profit from the special order is $19,500, it therefore implies that accepting it would increase operating income by $19,500.

Therefore, the correct option is d. Increase by $19,500.

6 0
3 years ago
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