manuf cost 250000 6) Kingdom Leasing, Inc. Incurred costs of $6500 in negotiating and closing the lease. There are no uncertainties regarding additional costs yet to be incurred and the collectibility of the lease payments is reasonably predictable. lease neg 6500 Required: PV res value 11566.2 a) Determine what type of lease this would be for the lessor and calculate the following: (show all work) $238,434 Lease Receivable Sales Price Cost of Sales b) Prepare Kingdom's amortization schedule for the lease terms. c) Prepare all the journal entries for Kingdom for 2012.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
| | | present value of future lease payments as an asset and also showing this same amount as an offsetting liability. | | | undiscounted sum of future lease payments as an asset and as an offsetting liability. | | | undiscounted sum of future lease payments, less the residual value, as an asset and as an offsetting liability. | 8 points Question 3 Which of the following statements is most CORRECT? Answer | | If new debt is used to refund old debt, the correct discount rate to use in the refunding analysis is the before-tax cost of new debt.
NeedsSpace should clarify with WeHaveIt about the statement “general repairs and maintenance” and what is specifically makes NeedsSpace liable for. If the lease required NeedsSpace to make deposits and set up a “repair and maintenance reserve,” the deposits would be recognized as an asset and reimbursed at the conclusion of the lease, less any repair and maintenance costs (ASC 840-10-5-9a to 9c). Since the lease does not explicitly require NeedsSpace to make maintenance deposits, NeedsSpace should expense any repairs as they are performed so the money is sitting in their bank account, not WeHaveIts account. Also, it should be noted that “the accrual method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods” (ASC 360-10-25-5). Therefore, NeedsSpace would not be able to set up an account that allows them to account for future
awrtuaworu artoawruor ouwropwauirawr powuerpo;;awrtja;wej;l.. Accounting Principles Business entity principle: Every business is accounted for separately from its owners personal activities. Going concern principle: The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless the evidence shows that it will not continue. Objectivity principle: The accounting guideline that requires financial statement information to be supported by independent , unbiased evidence
FASB ASC 840-10-25-4 provides guidance on whether lease payments constitute minimum lease payments: Lease payments that depend on a factor directly related to the future use of the leased property, such as machine hours of use or sales volume during the lease term, are contingent rentals and, accordingly, are excluded from minimum lease payments in their entirety. However, lease payments that depend on an existing index or rate, such as the consumer price index or the prime interest rate, shall be included in minimum lease payments based on the index or rate existing at lease inception. The lease payments of $100,000 at the end of each year constitute minimum lease payments because according to the lease agreement, these payments do not depend on any contingent rentals but depend on Lessor’s existing interest rate. According to FASB ASC 840-10-25-6(b), Lessee should also include $20,000 of the guaranteed residual value in the minimum lease payments because Lessee guaranteed and stated this amount in the
At inception, the terms of the lease were consistent with fair market rentals. The lease is the only contractual relationship between FastCar and Real Estate. II. Financial Reporting Issue or Issues presented in the case Does FastCar, the lessee (arrendatario) under the operating lease, hold a variable interest in Real Estate, the lessor (arrendador) entity? III.
Solvency ratios this is one of many ratios used to measure a company’s ability to meet long-term obligations. The solvency ratio measures the size of a company’s after-tax income, excluding non-cash depreciation expenses, as compared to the company’s total debt obligations. It provides a measurement of how likely a company will be to continue meeting its debt obligations. Users who may be interested in each type of ratio? Liquidity ratios are used by suppliers and other trade creditors.
Assignment 2: AirThread Connections Group 2: Taylor Bullock, Zoey Hourihan, Ben Kanter, Julie Ngai, Fernando Zavala FINE4600 Question 1: A. The discount rate Ms. Zhang should use for un-levered FCF for 2008-2012 is 7.30553%. Because the FCF are un-levered, this implies the firm has no debt. If the firm is all equity financed, the appropriate rate to discount the cash flows is the cost of equity. We calculated cost of equity using the CAPM method, where re = rf + B(EMRP) The case stated that the BBB+ rated bonds have an interest rate of 5.5%, or 125 bps over the current yield on 10 year US treasury bonds.
The property manager maintains and upgrades facilities while acting as liaison between the owner of the property and tenants, and attracting tenants to the property. Other roles include accepting rent, responses to maintenance issues, doing credits, and background checks on tenants. Since most property managers are in charge of a number of properties at any time, the job can involve crazy work, unusual hours, and extremely difficult schedule coordination. A property manager must have strong communications skills, strong organizational skills, sociable, persistent in achieving the goals, and a flair for numbers to handle the demanding position at the highest level. Three management concepts that I will need to apply to my desired career are establish agendas, manage day to day operations, and establish and enforce rules and procedures.