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Mkey [24]
3 years ago
15

On October 1, 2017, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual paym

ents of $10,000 beginning September 30, 2018. Vaughn's incremental borrowing rate is 11%, and it uses a calendar year for reporting purposes. The machine has a 12-year economic life with zero salvage value. Vaughn correctly classifies the lease as an operating lease under ASU 2016-02.
a. At what amount should Vaughn record the leased equipment on October 1, 2017? (Round your answer to the nearest whole dollar.)
b. What is the amount of rent expense that Vaughn should record for the year ended December 31, 2017, and for the year ended December 31, 2018?
c. How much of the lease liability should be classified as current on December 31, 2017, and December 31, 2018?
Business
1 answer:
Alisiya [41]3 years ago
7 0

Answer:

Explanation:

1.Amount to be paid Annually to fell leasing Company = $10,000.

Incremental rate of borrowing = 11%

Lease Period = 5 yrs.

2. Value of lease equipment as on 1st October 2017 i.e., date of lease.

= 10,000 * (PVOA) = (11* for 5 years)

=10,000 * 3.6959 (using -PVAF table)

= $ 36,959

Factors are used according to the table of PVAF

3.Lease liability as on 31-12-2017

= 10,000 * PVAD (11 * 4 years) [since 4 years in these)

 = 10,000 * 3.44371

= $ 34,437.10

Lease liability as on 31st Dec 2018

= 10,000 * PVAD (11% 3 years) (still 3 yrs left as on 31-12 -2018)

= 10,000 * 2.71252 = $ 27,125.20

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ehidna [41]

Answer:

Time period corresponds to recession is D. 1937-1939

Step-by-step explaination:

Recession period is the period in which there is negative growth in stock market i.e that period in which the graph declines or accompanied by drop.

In the given interval 1931-1935 upto period 1933 the graph declines but after that it increases so it does not corresponds to recession period.

In the given interval 1931-1934, same reason as above.

In given interval 1933-1936, the graph goes to upward direction so it does not corresponds to recession period.

In the given interval 1937-1939,the graph declines upto 1939 so it corresponds to recession period.

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ISooky has a spotter truck with a book value of $40,000 and a remaining useful life of five years. At the end of the five years
malfutka [58]

Answer:

$36,000 increase

Explanation:

For computing the increase or decrease in income, first we have to determine the net cash outflow which is shown below:

Net cash outflow = Purchase of new spotter truck - sale value of old truck

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Answer:

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