Question 18 of 20

Rauch Inc. leases a piece of equipment to Donahue Corp. on Jan 1 2017. The lease agreement called for annual rental payments of

Eduardwww [97]

Answer:

Explanation:

1. Suppose the instead of $8,250, Rauch expects the residual value at the end of the lease to be $5,000, but Donahue agrees to guarantee a residual value of $8,250. All other facts being eqaul, how would Rauch change the amount of the annual rental payments, if at all?

A lower residual value means the car is expected to hold its value less (depreciate more) over the lease term.

Therefore, since most of the lease payment covers the cost of depreciation., more depreciation (or lower residual value) will most likely result into higher monthly payments over the lease term.

2. Explain how a fully guaranteed residual value by Donahue would change the accounting for Rauch, the lessor.

The financial accounting term guaranteed residual value has to do with an additional payment made by a lessee in property, cash, or both at the termination of the lease.

Therefore since Guaranteed residual values are financial commitments made by the lessee, they are factored into the calculation of the minimum lease payment.

3. Explain how a bargain renewal option for one extra year at the end of the lease term would change the accounting of the lease for Rauch, the lessor.

A bargain renewal option is a clause in a lease contract that gives the lessee the option of extension of the term of the lease at a substantially lower trate than the going market rate.

The presence of this clause in a lease contract will most likely imply that the lease will change to a finance lease rather than an operating lease

4 0

2 years ago

When julie is focused on measuring performance and correcting as necessary, she is focusing on which of these managerial functio

Leya [2.2K]

Julie is focused on the control managerial function when she measures performance and corrects as necessary. There are five types of management functions and they are planning, organizing, directing, coordinating and control. In the control stage it allows managers to determine how much or how little control over the organization and their employees they wish to have.

6 0

3 years ago

The Buck Store is considering a project that will require additional inventory of $216,000 and will increase accounts payable by

Anestetic [448]

Answer:

$607,250 outflow

Explanation:

Net Working Capital is the amount of money needed to maintain operations on a day to day basis.

Net Working Capital = Current Assets - Current Liabilities

where,

Current Assets are calculated as :

Inventory $216,000

Accounts Receivable ($525,000 x 1.09) $575,250

Total $788,250

and

Current Liabilities = $181,000

therefore,

Net Working Capital = $788,250 - $181,000 = $607,250

Conclusion

The project's initial cash flow for net working capital is $607,250 outflow.

5 0

2 years ago

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company

-BARSIC- [3]

Answer:

A

Explanation:

As it is already mentioned that both businesses are different from each other, therefore, managing these two different business by having a one organizational structure will lead to confusion as in the case of question.

When two different business merge together this is called conglomerate integration.

Business merge together in order to enjoy the benefit of the term 'synergy' that means the whole is greater than sum of its parts. That bring definitely some advantages for the merged businesses.

But that too have disadvantages when the merged businesses failed to get benefits of the concept of synergy. That is, large businesses are difficult to manage, two different businesses require different set of management, and strategies.

3 0

2 years ago

assume the economy can produce either sports utility vehicles (suvs) or minivans. the graph below depicts the current production

Margaret [11]

The quantity of minivans quantity of SUVs ppf this is an example of Economic growth.

Even as the term SUV can be carried out to large automobiles, such as the Range Rover, Chevrolet Suburban, and Jeep-like SUVs, it may additionally observe to smaller cars that do not have four-wheel drive and feature a minimal capability of going off-road just like the Honda CRV and crossover SUVs.

SUV or recreation software car is a category of vehicles owning capabilities that make it appropriate for both on-street and stale-avenue riding. some of the latter talents that SUVs commonly have are better ground clearance, 4-wheel drive, and auxiliary utilitarian features such as roof rails.

Learn more about SUVs here: brainly.com/question/16796666

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5 0

7 months ago