Answer: $30,000
Explanation:
In accounting, the treatment of the Sale and Operating Leaseback operation is such that a gain is only recognized if the sales price is more than the fair value. In such a case the difference between the fair value and the carrying price is considered the Gain on Sale.
The Difference between the sales price and the fair value is to be amortized over the period of use.
Seeing as the selling price is more than the fair value, the Gain on Sale is therefore,
= Fair Value - Carrying Value
= 310,000 - 280,000
= $30,000
$30,000 is the amount of gain on sale of the property recognized by Alla on January 1, Year 1.
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Answer:
The return on assets and debt/equity ratio does not change
Explanation:
An operating lease does not affect assets and liabilities. From the formula:
Equity = Assets - Liabilities, since both assets and liabilities are not affected (they remain unchanged) therefore the equity is also the same.
The debt/ equity ratio = total liabilities/total equity. Since liabilities and equity remain unchanged, therefore The debt/ equity ratio is the same.
Also the return of assets (earnings/assets) remain the same
Answer:
B.sacrifice consumption goods and services now in order to enjoy more consumption in the future.
Explanation: Tradeoff is a term used in Economics to refer to the sacrifice of a particular quality or goods in order to enjoy the benefits of the use of another.
Tradeoffs are applied in Economic decisions especially in a situation where there are two competing needs, it is applied in order to choose the most urgent and necessary while the other can be considered for a later day or period.
Applying tradeoffs in Economic decisions will lead to an increase of one factor or need which will lead to a decrease in another factor or need.