Answer:
Annual lease payment = $6874.69
Explanation:
Computation of annual rental payment:
Residual value = 28000
present value (6%,4Yr) = 0.79209
Present value = 28000 x 0.79209
present value of residual value = $22178.52
Fair value of machine = $46000
Less: present value of residual value =22178.52
Amount recover from lease = Fair value of machine minus present value of residual value
Amount recover from lease = $46000 - $22178.52
Amount recover from lease = $23821.5
Annual lease payment = Amount to be recover from lease divided by present value Annuity factor (6%,4yr)
Annual lease payment = 23821.5/3.46510
Hence,
Annual lease payment = $6874.69
Answer:
a. debit Depreciation Expense $ 290
credit Accumulated Depreciation $ 290
Explanation:
The depreciation has to be calculated for the month of December i.e one month.
The annual depreciation per the question is $ 3,480 so the monthly depreciation expense is $ 290.
The depreciation expense account is debited, and the credit is to accumulated depreciation account. The equipment account is not credited directly, This is to show the costs and the accumulated depreciation separately.
The equipment on the balance sheet is shown as net of accumulated depreciation.
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Answer:
a) $158.41
Explanation:
Unit product cost under absorption costing
= Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead / Total manufactured units
= (214,674 + 121,842 + 243,684 + 319,110) /29,010
= $899,310 / 29,010 unit
= $31 per unit
Ending inventory = $29,010 - $23,900 / $31
= $5110 * 31 per unit
= $158,410
