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Marianna [84]
3 years ago
15

Emporia Corporation is a lessee with a capital lease. The asset is recorded at $810,000 and has an economic life of 8 years. The

lease term is 5 years. The asset is expected to have a fair value of $270,000 at the end of 5 years, and a fair value of $90,000 at the end of 8 years. The lease agreement provides for the transfer of title of the asset to the lessee at the end of the lease term. What amount of depreciation expense would the lessee record for the first year of the lease?
a. $162,000.
b. $144,000.
c. $108,000.
d. $90,000.
Business
1 answer:
Doss [256]3 years ago
4 0

Answer:

The amount of depreciation expense the lessee should record for the first year of the lease is $108,000

Explanation:

To calculate the depreciation expense for each year the first thing you have to do is to substruct from the initial value the fair value at the end fo the lease, obtaining this way the depreciable amount.

For this case it would be:

$810,000 - $270,000= $540,000

Then you have to divide the depreciable amount by the years of the term the lease.

$540,000/5= $108,000

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4 0
2 years ago
Wilturner Company incurs $90,000 of labor related directly to the product in the Assembly Department, $39,000 of labor related t
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Answer:

Wilturner Company

The journal entries to record the labor for the Assembly Department would include:

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Your industrial supply company wants to create a data warehouse where management can obtain a single corporate-wide view of crit
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Answer:

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