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makkiz [27]
3 years ago
7

Bryant leased equipment that had a retail cash selling price of $690,000 and a useful life of six years with no residual value.

The lessor spent $575,000 to manufacture the equipment and used an implicit rate of 8% when calculating annual lease payments of $138,201 beginning January 1, the beginning of the lease. Lease payments will be made January 1 each year of the lease. Incremental costs of consummating the lease transaction incurred by the lessor were $19,500.
Required:
What is the effect of the lease on the lessor's earnings during the first year (ignore taxes)?
Business
1 answer:
bearhunter [10]3 years ago
7 0

Answer:

$139,644

Explanation:

Calculation for the effect of the lease on the lessor's earnings during the first year

Effect on lessor's pretax earnings

Sales revenue 690,000

Less Cost of goods sold(575,000)

Less Selling expense(19,500)

Interest revenue 44,144

Income effect $139,644

Calculation for Interest revenue

Interest revenue=(8%*690,000)-(8%*$138,201)

Interest revenue =55,200-11,056

Interest revenue=44,144

Therefore the effect of the lease on the lessor's earnings during the first year will be $139,644

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Answer:

A). The price of gasoline increased in coastal cities since gasoline was harder to find.

Explanation:

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Gasoline has no close substitutes, especially when used as fuel for cars and generators. A shortage results in the scramble for the little available products. Sellers hike prices to maximize profits, and buyers are willing to pay more to get the scarce gasoline, thereby increasing its prices.

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3 years ago
The perimeter of a rectangle with a width x and a length that is four times the widthA nursery has $55,000 of inventory in dogwo
nalin [4]

The question is incorrect. The correct question is as follows,

A nursery has $55,000 of inventory in dogwood trees and red maple trees. The profit on a dogwood tree is 28% and the profit on a red maple tree is 17%. The profit for the entire stock is 20%. How much was invested in each type of tree?

Answer:

The investment in Dogwood trees is $15000.

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Explanation:

To calculate the investment in each type of tree, we will say that x was invested in dogwood trees and the investment in red maple trees was 55000-x.

The profit on the entire investment is calculated as the weighted average of the profit on dogwood trees and profit on the red maple trees. The formula for overall profit can be written as follows,

Overall profit = Investment in dogwood / total investment * profit % on dogwood  +  Investment in red maple / total investment * profit % on red maple

0.2 = x / 55000 * 0.28  +  (55000 - x) / 55000 * 0.17

0.2 = 0.28x / 55000  +  (9350 - 0.17x) / 55000

0.2 = 0.28x + 9350 - 0.17x / 55000

0.2 * 55000 = 0.11x + 9350

11000 = 0.11x + 9350

11000 - 9350 = 0.11x

1650 / 0.11 = x

x = $15000

If x is $15000, this means that the investment in Dogwood trees is $15000.

If x is $15000, this means that the investment in red maple trees is 55000 - 15000 = $40000

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The necessary journal has been attached

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