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3 years ago

Which of the following statements is FALSE?

Business

1 answer:

Mandarinka [93]3 years ago

3 0

Answer:

C. The annual percentage rate indicates the amount of interest including the effect of compounding.

Explanation:

Annual interest rate, indicates the simple interest that can be earned annually on the investment, until and unless it is clearly mentioned to be compounded with the time period defined it cannot be concluded that the interest is carrying the compound benefit.

Therefore, the above stated option C is a false statement.

Final Answer

C. The annual percentage rate indicates the amount of interest including the effect of compounding.

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(Lessee-Lessor Entries, Sales-Type Lease; Guaranteed Residual Value) Phelps Company leases a building to Walsh, Inc. on January

Artist 52 [7]

<u>Solution and Explanation:</u>

Calculation of Minimum lease annual payments from (MLP)

Year MLP from lessor Present value Present valur of

point of view factor 8% cash flows

1 $4,703 $1 /(1.08)=0925$ $4,350.28

2 $4,703 $1 /(1.08)^{\wedge} 2=0.857$ $4,030.47

3 $4,703 $1 /(1.08)^{\wedge} 3=0.793$ $3,729.48

4 $4,703 $1 /(1.08)^{\wedge} 4=0.735$ $3,456.71

5 $4,703 $1 /(1.08)^{\wedge} 5=0.680$ $3,198.04

Total of Minimum

lease Payments $23,515 $ 18,764.97

Add

Unguaranteed

residual value(ugrv) 4000 $1 /(1.08)^{\wedge 5}=0.680$ $2,720.00

Asset to be recorded

in the books of lessor

(sum of mlp +ugrv) $27,515 $ 21,484.97

Here

Gross Investment=$27515

Lease receivable recorded in in the books of lessor(Phelps)(Mimum lease payments + Unguaranteed residual )value = $21484 $21,484

Walsh (lessee) shoiuld be recorded the amount of present value of minimum lease payments + Guaranteed Residual value=$18764.97 as asset and liabilty

b) In the books of phelps (lessor)

2017.01.01 Lease Recievble from walsh ….Dr $21,484

to Asset $21,484

(Being Lease receivable recorded )

In the books of Walsh (lessee)

2017.01.01 Asset ac ……………Dr $18,764

to Lease Liabilty(Lessor) $18,764

(Being the asset and liabilty recorded )

2017.12.31 Depreciation ……Dr 3752

to Asset 3752

(Beint Depreciation recorded charged during the year recorded 18764/5 provided for 5 years)

Here annual payment started from the at the beginning of year i.e annual lease payments start from 01.01.2018.

c) If expected residual value of $4000 is guaranteed by walsh no changes will be made in classification of lease and there is no chages in asset recorded in Lessor books. But changes will be made in the books of lessee as present value of guaranteed residual value should be added to asset I.e $18764+Present vlue of $4000 $18764+2720=21484

d) If expected residual value of $3000 is guaranteed by walsh no changes will be made in classification of lease and there is no chages in asset recorded in Lessor books But changes will be made in the books of lessee as present value of guaranteed residual value should be added to asset I.e $18764+Present vlue of $3000 $18764+$2040=$20804

5 0

3 years ago

he following information relates to the manufacturing operations of the Abbra Publishing Company for the year: Beginning Ending

Serhud [2]

Answer:

Purchases= $1,091,000

Explanation:

Giving the following information:

Beginning Raw materials inventory = $549,000

Ending Raw materials inventory= $612,000

The raw materials used in production= $1,028,000.

<u>To calculate the raw material purchased, we need to use the following formula:</u>

Purchases= production + ending inventory - beginning inventory

Purchases= 1,028,000 + 612,000 - 549,000

Purchases= $1,091,000

4 0

3 years ago

_____1. The price paid for the use of someone else’s property.

jonny [76]

The correct term to fill in the blank would be rent. The price paid for the use of someone else's property is called rent. It is a periodic and fixed amount of money paid by one that uses the possession of one.

7 0

3 years ago

HELP ASAP!!! As the director of sales, Piper wants to create a bar graph to compare the year-to-date sales made by her top five

viva [34]

Answer:

The first graph I think

Explanation:

the one with more lines

5 0

2 years ago

Which of the following best describes how consumers make financial decisions in a market economy? A. The media forces consumers

notka56 [123]

Answer:

B. They make choices based on their self-interests.

Explanation:

A market economy can be defined as the economy of a country where by the government has a minimal influence or intervention on how the market operates.

A market economy is regulated by the individuals that owns the businesses in that economy. These individuals have the ability to direct resources that they need from production to their firms and businesses.

A market economy is largely or greatly influenced and regulated by the rate of supply and demand. Consumers in a market economy have to sometimes paid a high price for the goods and services that they require. Consumers make financial decisions in a market economy by making their choices based on self interests.

A market economy is a very competitive economy because

a. the demand of goods and services by consumers have increased therefore this results in an increase in production of goods and services.

b. The producers tend to high innovative when producing this goods and services required by the consumers.

In a market economy, businesses and firms tend to have an increased of a very high rate of efficiency when producing goods and services such that they minimise or lower the cost of production while ensuring that they make high or huge amounts of profits.

4 0

3 years ago