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Zina [86]
3 years ago
7

Tamarisk Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Carla Vista Company. The t

erm of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:1. Carla Vista has the option to purchase the equipment for $24,500 upon termination of the lease. It is not reasonably certain that Carla Vista will exercise this option.2. The equipment has a cost of $290,000 and fair value of $319,000 to Tamarisk Leasing. The useful economic life is 2 years, with a residual value of $24,500.3. Tamarisk Leasing desires to earn a return of 5% on its investment.4. Collectibility of the payments by Tamarisk Leasing is probable.Prepare the journal entries on the books of Tamarisk Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018. (
Business
1 answer:
bixtya [17]3 years ago
8 0

Answer:

a. $46,000

see the other answers in the explanation

Explanation:

(a) Fair value of leased asset to lessor $245,000

Less: Present value of unguaranteed residual value $24,335 X .63017

(present value of 1 at 8% for 6 periods) $15,335

Amount to be recovered through lease payments $229,665

Six periodic lease payments $229,665 ÷ 4.99271 $46,000*

*Present value of an annuity due of 1 for 6 periods at 8%.

b.

(c)

1/1/17

Lease Receivable 245,000

Cost of Goods Sold 229,665

Sales Revenue 229,665

Inventory 245,000

1/1/17

Cash 46,000

Lease Receivable 46,000

12/31/17

Lease Receivable 15,920

Interest Revenue 15,920

1/1/18

Cash 46,000

Lease Receivable 46,000

12/31/18

Lease Receivable 13,514

Interest Revenue 13,514

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1. In the problem solving process, which step comes before Take Action?
Ainat [17]
A. Define the Problem first before take action.
4 0
3 years ago
Consider a firm with an EBIT of $559,000. The firm finances its assets with $1,090,000 debt (costing 6.4 percent) and 209,000 sh
Stells [14]

Answer:

EPS before change in capital structure = $2.34

EPS after change in capital structure       $3.45

Difference in EPS caused by the change ($1.11)

Explanation:

a) Data and Calculations:

EBIT = $559,000

6.4% Debts = $1,090,000

Common stock = 209,000 shares at $15 per share

EPS before increasing debt:

EBIT = $559,000

Interest  (69,760) (6.4% of $1,090,000)

Net income = $489,240

EPS = $489,240/209,000 = $2.34 per share

EPS after increasing debt:

New debt = $1,990,000 ($1,090,000 + $900,000)

New equity shares = 125,000 shares (209,000 - 84,000)

EBIT = $559,000

Interest (127,360) (6.4% of $1,990,000)

Net income = $431,640

EPS = $431,640/125,000 = $3.45 per share

EPS before change in capital structure = $2.34

EPS after change in capital structure       $3.45

Difference in EPS caused by the change ($1.11)

3 0
3 years ago
Because budgeted fixed costs remain the same regardless of production volume, a(n):________ variance occurs when there is a diff
blsea [12.9K]

Answer:

A production volume variance

Explanation:

A production volume variance occurs when there is a significant difference between the actual volume of products manufactured and the budgeted or standard volume of production. Therefore, a production volume variance can be harnessed by businesses in order to measure the production cost of products against the budgeted fixed cost.

The production volume variance can be calculated by difference between actual volume of production and the standard volume of production, multiplied by the overhead rate that have been budgeted.

So, when calculating the production volume variance, if the actual volume of production is lower than the budgeted or standard volume of production, then the production volume variance is not favorable.

7 0
3 years ago
A manufacturing company has a beginning finished goods inventory of $27,300, cost of goods manufactured of $57,500, and an endin
Vaselesa [24]

Answer:

$58,200.

Explanation:

We use the inventory identity to solve for COGS

$$Beginning Inventory + Production = Ending Inventory + COGS

Beginning Inventory  27,300

Production  57,500

Ending  26,600

27,300 + 57,500 = 26,600 + COGS

COGS = 27,300 + 57,500 - 26,600

COGS = 58,200

6 0
3 years ago
Granfield company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,
Paul [167]

Answer:

The impact on Granfield company operating income segment would be an increase of $208,400.

Explanation:

There would be an increase of $208,400 for Granfield company operating income segment due to the eliminated fixed cost from the payback division.

This means that there would be efficient operations of other business segment of Granfield as a result of the eliminated fixed cost from the payback division. Also, there will not be sales and variable cost accruable to the company-Granfield, in the future.

Calculation;

40% * $521,00 = $208,400

6 0
3 years ago
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