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pogonyaev
3 years ago
13

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

eement. The contract calls for quarterly rent payments of $30,000 each. The office building was acquired by Lakeside at a cost of $2.5 million and was expected to have a useful life of 25 years with no residual value.
What will be the effect of the lease on LTT's earnings for the first year (ignore taxes)?
Business
1 answer:
Karolina [17]3 years ago
3 0

Answer:

The earnings will increase by $20,000

Explanation:

This is because none of the five classification criteria is met, this is an operating lease. Accordingly, Lakeside will record lease revenue for each of the four $30,000 payments, increasing its earningsby $120,000 each year. In addition Lakeside, as owner of the asset, will record depreciation. Assuming straight-line depreciation of the $2.5 million cost over the 25-year life, that’s $100,000depreciation expense each year. So, earnings are increased by a net $20,000 ($120,000 − $100,000).

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On February 1, a customer's account balance of $2,700 was deemed to be uncollectible. What entry should be recorded on February
Anvisha [2.4K]

Answer:

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.

The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:

Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.

Explanation:

Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.

The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount.  Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order.  This method is unlike the direct write-off method.  With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.

5 0
3 years ago
You deposit $100 in an account that pays 6 percent annual interest, compounded quarterly. What will your deposit grow to in 3 ye
Burka [1]

Answer:

$119.56

Explanation:

We will use compound interest formula to solve this problem.

The formula is:

F=P(1+r)^t

Where

F is the future value

P is the present amount

r is the rate of interest per period

t is the number of periods

Here,

F is the value we want, after 3 years

P is the present amount, $100

r is the rate of interest per quarter (per period)

Given r = 6% annually, so that would make:

6%/4 = 1.5% per quarter, or 1.5/100 = 0.015

Also, t is the number of quarters in 3 years, that would be 4*3 = 12

Now, substituting, we get our answer:

F=P(1+r)^t\\F=100(1+0.015)^{12}\\F=100(1.015)^{12}\\F=119.56

The first answer choice is right, $119.56

3 0
3 years ago
In some developing countries, children work in factories when they are 8 or 9 years old. The United States has strict child labo
Katena32 [7]

Answer:

b. They reflect the laws and regulations that affect social and economic behavior.

Explanation:

Morals are not universal and vary greatly depending on the underlying culture and religion. Even still in each civilization, there are many grey areas in the concept of morals. One thing that seems to be constant is that they reflect the laws and regulations that affect social and economic behavior. In this scenario, some developing countries believe that using children as a cheaper form of labor is fine since the children are getting paid and therefore, there are no laws prohibiting this action so people see it as morally correct. While other countries that see it as morally wrong have laws and regulations to prevent people from performing such actions. These laws and regulations are a form of dictating social and economic behavior by stating that it is morally wrong.

3 0
3 years ago
a college in a metropolitan area wishes to increase its evening offerings of business-related courses such as marketing, account
SSSSS [86.1K]

Answer:

Target markets are management and business students looking forward for employment and full year courses.

Explanation:

  • The target market can be those who are working full time in the day and may also include the small and medium business owners that intend to provide some sort of online cloud computing set up for the college, and
  • It may be the students that want to continue their higher education and pursuing a full degree. These may also include the off-campus students that are interested in doing professional courses.
5 0
3 years ago
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize
Nutka1998 [239]

Question Completion:

Journalize the entries to record the summarized operations.

Answer:

Royal Technology Company

Journal Entries:

Debit Materials $496,110

Credit Accounts Payable $496,110

To record the purchase of materials on account.

Debit Work in Process $362,560

Debit Factory Overhead $54,170

Credit Materials $416,730

To record materials requisitioned for production and general factory use.

Debit Work in Process $413,900

Debit Factory Overhead $97,090

Credit Factory labor $510,990

To record factory labor used in production.

Debit Factory Overhead $119,070

Debit Selling Expenses $183,560

Debit Administrative Expenses $109,140

Credit Accounts Payable $411,770

To record costs incurred on account.

Debit Factory Overhead $22,820

Debit Selling Expenses $19,350

Debit Administrative Expense $13,890

Credit Prepaid Expenses $56,060

To record expired prepaid expenses.

Debit Factory Overhead $22,820

Debit Depreciation Expense - Office Equipment $33,740

Debit Depreciation Expense - Office Building $66,480

Credit Depreciation Expenses $123,040

To allocate depreciation expenses.

Debit Work in Process $282,780

Credit Factory Overhead $282,780

To record overhead costs applied to jobs.

Debit Finished Goods Inventory $654,870

Credit Work in Process $654,870

To transfer completed jobs to the finished goods inventory.

Debit Cost of Goods Sold $635,020

Credit Finished Goods Inventory $635,020

To record the cost of goods sold.

Explanation:

Journal entries are made when a transaction is initially recorded.  They show the accounts to be debited and the ones to be credited.

4 0
2 years ago
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