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Travka [436]
3 years ago
11

An airline has the following data about an​ airplane:

Business
1 answer:
Drupady [299]3 years ago
6 0

Answer:

Option C). This is a capital lease because it meets at least one of the four capital lease criteria.

Explanation:

In the following situations, the lease transactions are called Finance Lease.

i) The lessee will get the ownership of leased asset at the end of the lease term.

ii) The lessee has an option to buy the leased asset at the end of lease term at price, which is lower than its expected fair value at the date on which option will be excercised.

iii) The lease term covers the major part of the life of asset.

iv) At the beginning of lease term, Present value of minimum lease rental covers substantially the initial fair value of the leased asset.

In the given question, Present value of minimum lease rental amounting to $ 78 million covers substantially 94 % portion of the initial fair value of leased asset. Accordingly, last condition / last situation mentioned above to treat lease as finance lease is satisfied in the given question. In other words, out of four capital lease criteria mentioned above, fourth criteria / fourth condition (At the beginning of lease term, Present value of minimum lease rental covers substantially the initial fair value of the leased asset) is satisfied in this given question.

Present value of minimum lease rental as a percentage of initial fair value of leased asset :-

= (78 Million / 83 Million ) * 100

= 0.94 * 100

= 94 % (approx).

Lease in given question is capital lease because it meets at least one of the four capital lease criteria.

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3 years ago
he following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures.T
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Answer:

b. 14.0%

Explanation:

NET INCOME  

Sales  $ 100.000

Net Income  $ 25.000

Preferred Stock  -$ 4.000

Net Income to Stockholders' equity—common $ 21.000   14%

Net Income to Stockholders         $ 21.000

                                                      ===========  =   14%

Stockholders' equity—common    $ 150,000

5 0
3 years ago
Top management of Drexel-Hall is considering closing Store 3. The three stores are close enough together that management estimat
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Answer:

Compute the increase or decrease that closing Store 3 should cause in: a. Total monthly sales for Drexel-Hall stores.

  • total monthly sales should decrease from $1,800,000 to $1,380,000 = a $420,000 reduction

b. The monthly responsibility margin of Stores 1 and 2.

  • store 1 responsibility margin increased from 10% to 12.55% (2.55% increase)
  • store 2 responsibility margin increased from 9% to 13.69% (4.69% increase)

c. The company’s monthly income from operations.

  • increased from $72,000 to $140,200 ($70,200 increase)

Explanation:

                                                Store                 Store                Total                                          

                                                   1                         2

Sales                                         $660,000          $720,000     $1,380,000

Variable costs                          $409,200          $453,600        $862,800

Contribution margin                $250,800          $266,400         $517,200

Controllable fixed costs           $120,000          $102,000        $222,000

Performance margin                $130,800           $164,600        $292,200

Committed fixed costs              $48,000            $66,000         $114,000

Store responsibility margin      $82,800             $98,600        $178,200

Common fixed costs                                                                    $38,000

Income from operations                                                             $140,200

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Wombles corporation is contemplating purchasing equipment that would increase sales revenues by $478,000 per year and cash opera
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A. “provides details about an investment offering”
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