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21. A noncancelable lease contains an option to purchase a leased asset at a price that is sufficiently lower than the asset's e

Tanzania [10]

Answer: A. Sales-type lease

Explanation:

A Sales type lease is one where the present value of all the lease payments of the Asset being leased is more than the cost/ carrying amount of the Asset.

The present value of the lease Payments is the Fair Value of the asset and as seen from the question, the fair value of the asset is more than the cost of the Asset. The lease will therefore be accounted for as a Sales type lease by the lessor.

It is worthy of note that this entry affects only the lessor.

7 0

3 years ago

g Declaring bankruptcy by the bond issuing firm ______ . a. has no impact on value of its bonds b. increases the value of its bo

Scilla [17]

Answer:

c. decreases the value of its bonds

Explanation:

There is a significant decrease in the value of the bond if the firm declares bankruptcy.

4 0

3 years ago

Consider a 3-year bond with a par value of $1,000 and an 8% annual coupon. If interest rates change from 8 to 6% the bond's pric

masya89 [10]

It’s B Decrease by 51.54 I hope this helps

3 0

3 years ago

On January 1, Mitzu Co. pays a lump-sum amount of $2,700,000 for land, Building 1, Building 2, and Land Improvements 1. Building

Leviafan [203]

Answer:

Land (Dr.) $1,800,000

Land Improvements $540,000

Building 2 $660,000

Building 1 demolish expense $346,400

Land grading expense $187,400

Building 3 construction cost $2,242,000

Land 2 improvement cost $168,000

Cash (Cr.) $22,143,800

Explanation:

Mitzu Co. has paid lump sum amount for 2 buildings and land. The building 1 has no value so its value is considered as zero and all the amount will be attributed to land and building 2. The company has also incurred costs for the demolish of building 1 which will be charged in the books of accounts as one off expense.

8 0

2 years ago

Prepare a monthly flexible selling expense budget for Cottonwood Company for sales volumes of $300,000, $350,000, and $400,000,

rodikova [14]

Answer:

Sales volumes $300,000 $350,000 $400,000

Total selling expenses $541,500 $595,750 $650,000

Explanation:

Basically, a flexible budget can be described as a budget that adjusts with changes in volume or activity.

Therefore, monthly flexible selling expense budget for Cottonwood Company which adjusts with sales volumes can be prepared as follows:

Cottonwood Company

Monthly Flexible Selling Expense Budget

For the Month .....

Details $ $ $

Sales volumes 300,000 350,000 400,000

Variable selling expenses:

Sales comm. (6% of sales) 18,000 21,000 24,000

Shipping exp. (1% of sales) 3,000 3,500 4,000

Misc. selling exp. (1.5% of sales) 4,500 5,250 6,000

Fixed selling expenses:

Sales manager's salary 120,000 120,000 120,000

Advertising expense 90,000 90,000 90,000

Misc. selling expense 6,000 6,000 6,000

Total selling expenses  541,500   595,750   650,000 

8 0

3 years ago