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Rus_ich [418]
3 years ago
13

On January 1, Garcia Supply leased a truck for a four-year period, at which time possession of the truck will revert back to the

lessor. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 5% discount rate. Negotiations led to Garcia guaranteeing a $39,800 residual value at the end of the lease term. Garcia estimates that the residual value after four years will be $38,600. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What is the amount to be added to the right-of-use asset and lease liability under the residual value guarantee
Business
1 answer:
Andru [333]3 years ago
4 0

Answer:

$987

Explanation:

Calculation to determine the amount to be added to the right-of-use asset and lease liability under the residual value guarantee

First step is to determine the Present value of $1: n= 4, i = 5%

Present value of $1: n= 4, i = 5%

Present value of $1=.8227

Now let calculate the amount to be added to the right-of-use asset and lease liability under the residual value guarantee

Using this formula

Amount added to right-of-use asset and lease liability=(Guaranteed -Actual)*Present value

Let plug in the formula

Amount added to right-of-use asset and lease liability=($39,800-$38,600)*.8227

Amount added to right-of-use asset and lease liability= $1,200*.8227

Amount added to right-of-use asset and lease liability=$987

Therefore the amount to be added to the right-of-use asset and lease liability under the residual value guarantee is $987

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Angus Company agreed to sell goods for Longhorn Company on consignment, but wasn't willing to take ownership of the goods in cas
vladimir2022 [97]

Answer: D. Longhorn owns the inventory and should report it on its balance sheet.

Explanation:

Goods to be sold on consignment for a company means a company is selling goods for another company and will be paid for their services.

In that case, the company being sold for will retain the ownership of the goods because the company that is selling it for them is simply providing a service.

Angus in this scenario are simply holding the goods to sell it and so do not own the goods. Longhorn should therefore record it in their own books as inventory.

3 0
3 years ago
Leslie has developed a new kind of running shoe, and now she is trying to decide where to sell it. Which of the 4Ps of marketing
Crank
A. Price : hope) ich
6 0
3 years ago
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Valuable skills and knowledge that employees possess is called
blagie [28]
Answer:  "intellectual capital" .
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8 0
3 years ago
Fresh Foods, a large restaurant chain, needed to determine if it would be cheaper to produce 5,000 units of its main food ingred
ICE Princess25 [194]

Answer:

Fresh Foods

Make or Buy Decision:

1. Make the ingredient in-house.

2. Make in-house is more cost effective by $3,000 ($90,000 - 87,000)

3. If 40% of the fixed overhead can be avoided if the ingredient is purchased externally:

Total cost:

To make in-house = $87,000

To buy = $78,000 ($60,000 + $30,000 x 60%)

To buy now becomes more cost effective by $9,000 ($87,000 - 78,000).

Explanation:

a) Management in production companies are always faced with the buy or make decision.  For this type of decision making, the appropriate costs to analyze are the differential (incremental) costs.  These are costs that make a difference between alternatives.

b) Calculation of cost:

                                                                  Make                  Buy

                                                        Total            Unit

Purchase                                                                              $60,000

Direct materials                           $25,000     $5.00

Direct labor                                     15,000       3.00

Variable manufacturing overhead  7,500        1.50

Variable marketing overhead         9,500        1.90

Fixed plant overhead                    30,000       6.00            30,000

Total                                             $87,000    $17.40         $90,000

Total variable costs                     $57,000                        $60,000

6 0
3 years ago
What is the market value of a stock that paid a dividend of $3.80 last year if the dividend is increasing at 10% annually and th
Papessa [141]

Answer:

The market value of the stock is $41.8

Explanation:

Div 1 = Div 0 (1+r)

=3.80 (1+0.10)

=3.80(1.10)

=4.18

Market value of the stock= Dividend 1 / (r-g)

= 4.18 / 0.2 - 0.1

= 4.18 / 0.1

= $41.8

The market value of the stock is $41.8

7 0
3 years ago
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