In many corporations, there is "separation of ownership from control." what does this mean

At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a nine-year operating lease agre

ziro4ka [17]

Answer:

a.Lakeside's earnings will reduce by $156,000

b. Lakeside's earnings will increase by $20,000.

Explanation:

The rental fee payment per quarter =$39,000.

The rental fee payment per year = $39,000 x 4 = $156,000

In this case, none of the classification criteria of a capital lease is met. Hence, the lease will be recorded as an operating lease and all the four quarterly payments will be recorded as rent expense by LLT. This will reduce LTT's earnings by $156,000.

Lakeside will record all the payments received from LTT as rent revenue since it is an operating lease. Also, because Lakeside is the owner of the asset, she will record depreciation on the asset too.

Thus,

Increase in lakeside's earnings = Rent revenue - Depreciation expense.

Rent revenue = $156,000

Depreciation expense = $3,400,000 / 25 = $136,000

Thus,

Lakeside's earnings will increase by $20,000 (that is , $156,000 - $136,000).

4 0

3 years ago

Rick prepared financial statements for MegaCorp knowing that it was going to use his statements to apply for a loan with Big Ban

Ymorist [56]

Answer:

The correct answer is the option D: Both the foreseeable doctrine and the restatement doctrine.

Explanation:

On the one hand, the <em>foreseeable doctrine</em> dictates that there is a limit in the liability of party for those acts that he has done and that carry a risk of foreseeable harm. Therefore that this point of view establishes that a reasonable person would be able to understand and so to know when a certain action would bring certain damages to another party.

On the oher hand, the <em>restatement doctrine</em> establishes that there are a set of treatises on legal subjects that primarily are looking for to inform judges and lawyers about general principles of common law. And therefore that those treatises will help both the judge and the lawyers at the time of the trial when the person has to go to court.

3 0

3 years ago

On May 7, Keenan Company purchased on account 620 units of raw materials at $21 per unit. During May, raw materials were requisi

a_sh-v [17]

Answer:

Dr Material Inventory $13,020

Cr Trade Payables $13,020

Dr Work In Progress $9,742

Cr Material Inventory $9,742

Explanation:

On 7th May the double entry would be to record the inventory purchases on credit which would increase the inventory by $13,020 (620*21) as under:

Dr Material Inventory $13,020

Cr Trade Payables $13,020

The material sent to production or manufacturing team would be recorded as increase in the work in progress by the value of the material issued which is $9,742 (211*$19 + 273*$21).

Dr Work In Progress $9,742

Cr Material Inventory $9,742

8 0

3 years ago

Randomly listed below are the steps for preparing a trial balance: (1) Verify that the total of the Debit column equals the tota

liberstina [14]

A test balance is used to detect any calculation error that may have occurred within the accounting system. For this, it is sought to verify if the total debits and the total credits are equal, for this the balance of all accounting books is compiled in column totals of both debit and credit. A company usually prepares a trial balance periodically, usually at the end of each reporting period.

In this case, to carry out the trial balance, you must first clarify the name of the company, the title of the trial balance and the date on which the trial balance is prepared, then proceed to list the ledger accounts and enter the debit and credit balances in the respective columns, then the columns are totalized and finally it is verified that the credit totals are equal to the debit totals

Answer

The correct order of the steps is (3), (2), (4) and (1)

7 0

3 years ago

What element of Pinterest can help potential followers learn more about your product and company?

madreJ [45]

Could the answer be advertisements

5 0

2 years ago

In many​ corporations, there is​ "separation of ownership from​ control." what does this​ mean

In many corporations, there is "separation of ownership from control." what does this mean