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worty [1.4K]
3 years ago
5

Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discou

nted at 6% was $58,500. Ten annual lease payments of $7,500 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $53,500, and its retail fair value was $58,500. The total decrease in earnings (pretax) in Karla's December 31, 2021, income statement would be (ignore taxes):
Business
1 answer:
Alekssandra [29.7K]3 years ago
7 0

Answer:

$4,455

Explanation:

The computation of total decrease in earnings (pretax) in Morris Dec. 31, 2021, income statement is given below:-

Interest expense upto 31 Dec 2021 = (Total present value of lease payment - Lease payment on July 1, 2021) × 6% × 6 ÷ 12

= ($58,500 - $7,500) × 6% × 6 ÷ 12

= $51,000 × 6% × 6 ÷ 12

= $1,530

Depreciation expense upto 31 Dec 2021 = Fair value of equipment ÷ Useful life × 6 ÷ 12

= $58,500 ÷ 10 × 6 ÷ 12

= $5,850 × 6 ÷ 12

= $2,925

So, the total decrease in earnings (pretax) in Morris Dec. 31, 2021, income statement = Interest expense upto 31 Dec 2021 + Depreciation expense upto 31 Dec 2021

= $1,530 + $2,925

= $4,455

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Mamont248 [21]

Answer:

the payback period of the project is 3.57 years

Explanation:

The computation of the payback period is shown below;

Payback period:

= Initial investment ÷Cash inflows

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We simply divided the initial investment by the cash inflows so that the project payback period could come

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Which of the following is a likely way the cost of living in another country
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A company: purchased 100 units for $20 each on January 31, purchased 100 units for $30 on February 28, and sold 150 units for $4
igomit [66]

Answer:

Ending inventory as at 31 December = $1500

Explanation:

First-In-First-Out is a method of inventory valuation whereby the stock that comes in first, is used first. This is common for inventory consisting of perishables, such as vegetables where if not used/sold soon, it would be wasted.

Jan 31: Purchases = $20 x 100 units = $2000

<em><u>Remaining inventory:</u></em>

$20 x 100 units = $2000

Feb 28: Purchases = $30 x 100 units = $3000

<em><u>Remaining inventory:</u></em>

$20 x 100 units = $2000

$30 x 100 units = $3000

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3 0
3 years ago
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option (C) is correct.

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Actual overhead: 132,000

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Total manufacturing costs: 642,000

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= Total manufacturing costs - Overhead applied - Direct materials used

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2 years ago
Supply of a product will tend to be more inelastic when
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