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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.

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That statement is  True
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3 years ago
Use the following to prepare the cash budget. What is the ending cash balance? Beginning cash balance $3,000; Cash receipts $50,
aleksley [76]

Answer:

 Ending cash balance = $13,000

Explanation:

<em>A cash budget is statement that shows the estimated cash receipts and the estimated cash payments for a forth coming accounting period. In addition, it provides information about the expected cash balance for the period to which it relates.</em>

With help of a cash budget, a business can plan ahead for  the usage of its surplus funds and how to finance its deficit cash position

Ending cash balance = Beginning cash balance + cash receipts - cash payment

             = 3,000 + 50,000 - 40,000

 Ending cash balance = $13,000

7 0
3 years ago
Monetary policy is defined​ as: A. The actions the Federal Reserve takes to manage tax policy and interest rates. B. The actions
yaroslaw [1]

Answer:

D) The actions the Federal Reserve takes to manage the money supply and interest rates.

Explanation:

The Federal Reserve System (FED) is an autonomous government entity of the United States of America that functions like a central bank. Its main responsibilities are to manage the nation's money supply (the total amount of money in the economy) and establish federal interest rates (interest yielded by T-bills, T-notes and T-bonds).

6 0
3 years ago
Will make you BRAINLIEST!
finlep [7]

Answer:

The recent loss of 440 manufacturing jobs at Ford Australia has generated a lot of debate about the long-term viability of the Australian car industry, and manufacturing in general. This debate has included arguments that manufacturing is important and needs more government support. It has also seen some commentators argue that Australian’s have no right to expect jobs in manufacturing.

While most of this debate has focused on the automotive manufacturing sector, there is a wider question that needs to be answered. This relates to the issue of whether it is feasible for an advanced economy to grow and prosper without a manufacturing sector?

Explanation:

3 0
3 years ago
Garland Company received proceeds of $235000 on 10-year, 6% bonds issued on January 1, 2018. The bonds had a face value of $2500
Lerok [7]

Answer:

$238000

Explanation:

The computation of the carrying value of the bond is shown below:

Given that

Face Value of Bonds = $250,000

Proceeds from issuance of bonds = $235,000

Before that we need to compute the following things

Now

Discount on Bonds Payable = Face Value of Bonds - Proceeds from issuance of bonds

= $250,000 - $235,000

= $15,000

Life of Bonds = 10 years

Now

Discount on Bonds amortized annually = Discount on Bonds Payable ÷ Life of Bonds

= $15,000 ÷ 10

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Now

Discount amortized is

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= $1,500 × 2

= $3,000

Finally

Carrying Value of Bonds = Issue Price + Discount amortized

= $235,000 + $3.000

= $238,000

5 0
3 years ago
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