Answer:
Part 1
Dr Lease rentals $300........ Expense
Cr Cash Account $300
Part 2
Dr Leased Equipment $63,536
Cr Finance Lease Liability $63,536
Explanation:
Part 1. Under the operating leases the lessee pays the monthly rentals which must be accounted for as an expense and the double entry is as under:
Dr Lease rentals $300........ Expense
Cr Cash Account $300
Part 2. Under the finance lease agreement, the lessee pays the value of the asset and the interest as well. So after the date of agreement when the asset is handed over the journal entry would be recording of the equipment received, which would written at its fair value or present value of the payments made. The journal entry would be:
Dr Leased Equipment $63,536
Cr Finance Lease Liability $63,536
Answer:
A) $60.00
Explanation:
to calculate the value of Sultan's stocks, we need to use the growing perpetuity formula:
stock price = dividend / (required return rate - growth rate)
- dividend = ($6,000,000 x 60%) / 1.2 million shares = $3,600,000 / 1.2 million shares = $3 per share
- required return rate = 10%
- growth rate = 5%
stock price = $3 / (10% - 5%) = $3 / 5% = $60 per share
This means that the tax you owe is less than what you paid for your taxes. Another circumstance is when you are entitled to tax credits. IRS stands of Internal Revenue Service. The circumstance in which you might receive a tax refund from the IRS if you have paid more in taxes than you owed for the year.
