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Firdavs [7]
3 years ago
6

A company leases trucks and properly classifies the leases as finance leases. The leases have a 10-year term, and the lease calc

ulations were done three years ago when interest rates were lower. Which of the following is the appropriate accounting treatment, if any, for the application of the fair value option to lease transactions?A. Recognize the change to fair value accounting with an unrealized loss in the income statement.B. Leases are not eligible for the fair value option.C. Recognize the change to fair value accounting with an unrealized loss in accumulated other comprehensive income.D. Recognize the change to fair value accounting with a cumulative adjustment to beginning retained earnings.
Business
1 answer:
pochemuha3 years ago
6 0

Answer:

D. Recognize the change to fair value accounting with a cumulative adjustment to beginning retained earnings.

Explanation:

In the situation whereby the 10 year term of the leased trucks value has adjusted leading to the increase in the interest rate of the lease, the best option would be recognize the change to fair value with its cummulative adjustment to beginning of the retained earnings.

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A company planned to sell 100 canoes for the month of April at an average sales price of $600. Midway through the month, the com
andreyandreev [35.5K]

Answer:

flexible budget amount for canoe sales revenue for April is $72000

Explanation:

given data

sell =  100 canoes

average sales price = $600

sold = 65

total sales = 130

canoes at an average price = $595

actual sales = 120 canoes

to find out

flexible budget amount for canoe sales revenue for April

solution

we know here for flexible budget april sale unit are = 120

and selling price is $600

so that April sales will be here = 120 × 600

April sales = 72000

so flexible budget amount for canoe sales revenue for April is $72000

3 0
3 years ago
The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rat
zaharov [31]

Answer:

$18,250

Explanation:

In this question, we are asked to calculate the net operating income for a division of a firm.

We proceed as follows;

Turnover=Sales/Average operating assets

Average operating assets=(730,000/2)=$365000

Return on investment=net operating income/Average operating assets

Hence Average operating assets=($365000*5%)

which is equal to

=$18250.

3 0
3 years ago
How would recession effect the economic
Virty [35]

Answer:

Recession cause standard monetary and fiscal effects.

Explanation:

Recession impact all kinds of business, large and small,due to tightening credit conditions, slower, demand, and general fear and uncertainty.

6 0
3 years ago
You deposited​ ($1,000) in a savings account that pays 8 percent​ interest, compounded​ quarterly, planning to use it to finish
olga55 [171]

Answer:

Present value (PV) = $1,000

Interest rate (r) =8% = 0.08

Number of years (n) = 18 months = 1.5 years

No of compounding periods in a year = 4

Future value (FV) = ?

FV = PV(1 + r/m)nm

FV = $1,000(1 + 0.08/4)1.5x4

FV = $1,000(1 + 0.02)6

FV = $1,000 x 1.1262

FV = $1,126

Explanation:

The amount to be received in 18 months is $1,126. This is obtained by compounding the present value at 8% compounded quarterly for 18 months. The formula to be applied is the formula for future value of a lump sum(single investment).

4 0
3 years ago
Maria has to choose between driving and taking a train to destination A. Travelling by train will cost her $400 and will take 4
dlinn [17]

Answer:

None of the options are correct

Explanation:

The train would cost her, which is computed as:

= Cost + (Hours × Opportunity Cost)

= $400 + (4 hours × $15 per hour)

= $400 + $60

= $460

The driving would cost her, which is computed as:

= Cost + (Hours × Opportunity Cost)

= $250 + (6 hours × $15 per hour)

= $250 + $90

= $340

Savings = Train Cost - Driving Cost

= $460 - $340

=$120

None of the options are correct as the she would save $120.

4 0
3 years ago
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