1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
stira [4]
3 years ago
8

On January 1, Year 1, Michael sold a property with a remaining useful life of 20 years to Wei Co. for $800,000. On the same date

, Michael leased back the property from Wei for 18 years. The lease was properly classified by Michael as a finance lease. Michael is not sure how to recognize the $800,000 received from Wei Co. on January 1, Year 1.
Required:
Which section of the Accounting Standards Codification best helps Michael Co. determine how the initial proceeds of $800,000 received from Wei Co. (buyer-lessor) are recognized?
Business
1 answer:
dezoksy [38]3 years ago
5 0

Answer:

The section of the Accounting Standards Codification that best helps Michael Co. to determine how the initial proceeds of $800,000 received from Wei Co. (buyer-lessor) are recognized is:

ASC 606.

Explanation:

This section that will help Michael Co. to determine if the transaction qualifies as a sale, which is treated under ASC 606, Revenues from Contracts with Customers.  Thereafter, the lease classification criteria in ASC 842 are evaluated.  After the evaluation, if none of the criteria from ASC 842 are met to account for the lease as a finance or capital lease, the seller-lessee would classify the lease as an operating lease.  This implies that the transaction qualifies as a sale and leaseback transaction.

You might be interested in
During its first year of operations, a company entered into the following transactions: Borrowed $5,000 from the bank by signing
fiasKO [112]

Answer:

The amount of total assets at the end of the year is $15,600

Explanation:

The computation of the total assets is shown below:

= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies

= $5,000 + $10,000 + $1,000 - $400

= $15,600

We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added

8 0
3 years ago
Eric sees this new assignment as an increase in​ ________, or an obligation or expectation for him to perform at a new level.
Triss [41]
The answer will be Responsibility Correct
7 0
3 years ago
2. What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, o
erastovalidia [21]

Answer:

1- A cabana along a beach that is open to the public --- Common resource

2- A new drum set for you to play in your friend's band --- Private good

3- A large, beautiful statue in a town square --- Public good

Explanation:

1- Common resources are goods that are not excluded, but are rival. Not excluded means that no restrictions can be imposed on the use, such as paying a price, for example because there is no personnel or technical provision available to enforce this.

2- Private goods are defined as goods that are excluded and rival. Private goods are the opposite of public goods.  

Excluded means that some consumers can be excluded from the use of this good. For example: Someone has bought a good and decides who uses the good.  

In turn, rival means that, if used properly, it cannot be consumed again or simultaneously by others.

3- A public good is a commodity or service characterized by two basic characteristics: non-rivalry and non-excludability.

Non-rivalry means that a person's consumption of a commodity does not affect the quantity or quality of the same commodity that another person can consume.

Non-excludability means that it is impossible to exclude anyone from the consumption of an item (for example, because it did not pay for the item). Goods that hold only one of the properties are called semicollective goods, while the goods that possess both properties are called genuine collective goods.

5 0
3 years ago
Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment sp
enyata [817]

Answer:

left by 30 billons

then right by 40 billons

Explanation:

the aggregate demand curve will move to the left as the consumption of the economy will fall as the household are less wealthy than before.

Then, as the interest rate fall the aggregate demand curve will move to the right as the investing increase as now more projects are profitable.

<em>Calculations:</em>

<em />

5 billon for every point of wealth:

6 points x 5 billon = 30 billons

20 billion of inventing per 1% of interest rate decrease

2 points x 20 billions = 40 billons

7 0
3 years ago
Ryan is a 25% partner in the rocc partnership. at the beginning of the tax year, ryan's basis in the partnership interest was $9
maw [93]
Your answer is going to be, $115,000
6 0
3 years ago
Other questions:
  • Assume that the demand for tuna in a small coastal town is given by p = 400,000 q1.5 , where q is the number of pounds of tuna t
    6·1 answer
  • Companies set rules about workplace conduct in order to
    14·1 answer
  • g Our company purchases $4,000 worth of merchandise inventory on credit with the terms 2/10, n/30. Transportation costs were an
    12·1 answer
  • On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred a
    12·1 answer
  • During 2016, the Beach Restaurant had sales revenues and food costs of $800,000 and $600,000, respectively. During 2017, Beach p
    8·1 answer
  • a company has designed a new type of smartphone, give an example of a business that might be affected by this. Explain how it wi
    15·1 answer
  • A typical payday loan carries an interest rate of about: A. 400 percent B. 31 percent C. 12 percent D. 7 percent
    9·1 answer
  • Trade sanctions were often enacted as expressions of U.S. revulsion against nations for their internal practices, such as human
    8·1 answer
  • Memphis Company anticipates total sales for April, May, and June of $970,000, $1,070,000, and $1,120,000 respectively. Cash sale
    9·1 answer
  • When bonds are issued at their face amount, the journal entry will include a __________ to __________.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!