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swat32
3 years ago
9

Klear Manufacturing sells its plant with a cost of $1.2 million to Burt Company for $1.4 million and immediately leases it back

for a 15-year term. The transaction does not meet the revenue recognition criteria under ASC Topic 606. At the inception of the sale and leaseback, Klear should debit cash and credit
a. notes payable.
b. sales revenue.
c. lease liability.
d. the asset.
Business
1 answer:
AfilCa [17]3 years ago
3 0

Answer:

Klear Manufacturing

At the inception of the sale and leaseback, Klear should debit cash and credit

c. lease liability.

Explanation:

a) Data and Calculations:

Debit Cash $1.4 million Lease Liability $1.4 million

Debit ROU asset $1.4 million Credit Plant $1.2 million Credit Gain from Sale $0.2 million

b) The sale and leaseback creates a right of use asset as well as a lease liability.  Therefore, the Cash account is debited for the cash receipts from the transaction and the Lease Liability is credited.  Also debited is the right of use asset with corresponding credits to the Asset account and Gain from Sale.

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If the quantity supplied by producers is relatively insensitive to price changes, supply is price inelastic.

Inelastic demand is demand for which the change in quantity demanded is small due to changes in price. Demand is elastic if the formula yields an absolute value greater than 1. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic.

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If the quantity supplied by producers is relatively insensitive to price changes, supply is ______. Multiple choice question.

price inelastic.

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7 0
2 years ago
Based on the details of the scenario, determine what will most likely occur. Jillian and Chase are making a contract in which Ji
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Answer: Contract is voided

Explanation:

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3 0
2 years ago
During a certain four-month period, the consumer price index (CPI) increased by only 5%. But during the next four-month period,
balu736 [363]
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6 0
3 years ago
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Troyanec [42]

Answer:

Thomas capital

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Inventory                   25,000

Cash                         <u> 45,000</u>

Total                       <u>  100,000</u>

Explanation:

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Inventory : the book value is $50,000 while the market value is $25,000. As a result of obsolescence, the inventory will be value at lower of cost and net realizable value(IAS2). therefore, $25,000 will be recognized for the inventory in the determination of Thomas capital

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3 years ago
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Answer:

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