Jay's lease payments are made at the end of each period. Jay's liability for a capital lease would be reduced periodically by theA. Minimum lease payment less the portion of the minimum lease payment allocable to interest.B. Minimum lease payment plus the amortization of the related asset.C. Minimum lease payment less the amortization of the related asset.D. Minimum lease payment.

Answers

Answer 1

Answer:

Answer:

A is the correct option.

Explanation:

Lease payment is similar to rent which is dictated under the contract between the two parties, which grants participants the legal right for using the real estate holding computers, software and other assets for a specified period of time. The time period for paying lease payment can range a monthly basis to long lengths of 100 years or more. The lease payment is decided by factors such as assets' value, discount rates, and the lessee's credit score.

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Most voluntary changes in accounting principles are reported retrospectively. This means for each year reported in the comparative statements, we make those statements appear as if the newly adopted accounting method had been applied all along. A journal entry is created to adjust all account balances affected as of the date of the change. In the first set of financial statements after the change, a disclosure note describes the change and justifies the new method as preferable. It also describes the effects of the change on all items affected, including the fact that the retained earnings balance was revised in the statement of shareholders’ equity.Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year 3. Inventory values at the end of each year since the inception of the company are as follows:FIFO LIFOYear 1 $195,000 $177,500Year 2 $390,000 $355,000Ignoring income tax considerations, prepare the appropriate journal entry, dated January 1, Year 3, to report this accounting change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is A. debit Cash, $6,120 credit Notes Receivable, $6,120B. debit Accounts Receivable, $6,120 credit Notes Receivable, $6,000 Credit Interest Receivable, $120C. debit Notes Receivable, $6,060 credit Accounts Receivable, $6,060D. debit Accounts Receivable, $6,120 credit Notes Receivable, $6,000Credit Interest Revenue, $120

A firm needs a data center with a life of three years. After three years, the data center is not needed and has no salvage value. The firm is deciding on the least costly alternative to access the data center. Under Plan A, the firm can incur an upfront cost of $120, 000. For this amount, the firm can purchase the center and move in immediately and use the facility. Under Plan B, the firm may lease the data center from owners on a monthly basis. The monthly rent is $3, 500. The firm’s borrowing cost based on APR (annual percentage rate) is 5% with semiannual compounding. Which option would you recommend to the firm? Purchase or rent? Show work. (20 pts.)

Answers

Answer:

Recommendation : The firm should lease the data center

Explanation:

To determine which option is better, we would compare the upfront cost of option A to the present value of the lease payment.

The present value of the lease payment is given as follows:

PV = A× 1-1+r^(-n) /r

A- semi-annual lease payment - 3,500× 6 = 21,000

r- semi-annual interest rate = 5%/2 = 2.5%

n- number of period = 3× 2 = 6.(note that interest is compounded semi- annually i.e every six month)

PV of the lease payment = 21,000 × (1 - 1.025^(-6))/0.025 =115,670.63.

Comparing the two options, we have :

Purchase cost = 120,000

Lease cost = 115,670.63.

The lease cost is lower and would save the firm 4329.37 i.e (120,000 - 115,670.63)

Recommendation : The firm should lease the data center

Final answer:

When comparing the cost of purchasing a data center outright versus leasing it on a monthly basis over three years, it is slightly more cost effective, factoring in the present value of money, for the firm to lease the data center. The total present value cost of leasing is approximately $119,199.09, while purchasing would be $120,000.

Explanation:

The subject matter of this question involves determining the least expensive option for accessing a data center over a span of three years, given two possibilities: purchasing the center outright (Plan A), or leasing it on a monthly basis (Plan B). It's a form of capital budgeting, specifically a cost comparison method.

For Plan A, the upfront cost is $120,000. This cost is incurred immediately and there are no further costs associated with it for the three-year period.

Plan B needs to be evaluated using the time value of money because the monthly lease payments are made over time. Given the borrowing cost/APR of 5% and the semiannual compounding, it means the interest is compounded twice a year. The monthly cost of leasing the data center is $3,500. Over three years (36 months), this would amount to $3,500 x 36 = $126,000.

However, since we need to factor in the cost of borrowing, we need to calculate the present value (PV) of the lease payments. Because the interest is compounded semiannually, the effective monthly interest rate is (1+0.05/2)^(2/12)-1

= 0.00407412378303.

Using this to calculate the present value of an ordinary annuity formula:

P V = $3,500 x (1-(1+0.00407412378303)^-36)/0.00407412378303.

P V under Plan B is approximately $119,199.09.

Comparing the two plans, it's evident that Plan B (leasing) is the cheaper option by just under $1,000. Therefore, it would be more cost-effective for the firm to lease the data center rather than purchasing it outright.

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Jensen Company uses the percentage of credit sales method for calculating Bad Debt Expense. The company reported $216,000 in total sales during the year; $178,000 of which were on credit. Jensen has experienced bad debt losses of 6% of credit sales in prior periods. What is the estimated amount of Bad Debt Expense for the year

Answers

Answer:

$10,680

Explanation:

Bad debt expense can be seen as an account receivables which are uncollectible during a period of time because of the customers inability to fulfill his /her financial obligations which therefore result into bad debt.

(Bad Debt Expense = Net credit sales × Bad debt loss rate )

= $178,000 × 0.06 = $10,680

Therefore the estimated amount of Bad Debt Expense for the year is $10,680

Which part or phrase in the passage describes a method of primary market research that Jeremy might choose?Jeremy works as a researcher for his employer. He will be conducting market research because his company plans to launch a new
product in the market. Jeremy hasn't decided on the type of research method that will help him accomplish the research task. He has
considered searching for available information in trade journals and newsletters. He also thinks that he could collect a group of
consumers and interview them personally to understand their opinions. He could also look for relevant data on business-related
websites. He has also considered referring to census reports and other publications that might help him with the research.

Answers

He also thinks that he could collect a group of consumers and interview them personally to understand their opinions.

This is the answer because in the primary market research you find people to do it for you and getting a group involves other people.

Answer:

The answer is B. I think.

Explanation:

Iris collected $150,000 on her deceased husband's life insurance policy. The policy was purchased by the husband's employer under a group policy. Iris's husband had included $5,000 in gross income from the group term life insurance premiums during the years he worked for the employer. She elected to collect the policy in 10 equal annual payments of $18,000 each.a. None of the payments must be included in Iris's gross income.b. The amount she receives in the first year is a nontaxable return of capital.c. For each $18,000 payment that Iris receives, she can exclude $500 ($5,000/$180,000 × $18,000) from gross income.d. For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 × $18,000) from gross income.e. None of these.

Answers

Answer:

d. For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 × $18,000) from gross income.

Explanation:

The life insurance proceeds of $150.000 are excluded from Iri's gross income. The income proportion of each annuity payment is $3.000 (18.000 - 15.000 recovery of capital). Which will be included in gross income.

The recovery of capital of each annuity payment is $15.000 [(150.000/180.000]. Which will be excluded.

Louvers, Inc., accepted a $15,000, 180-day, 10 percent note from a customer on May 31. Louvers plans to prepare financial statements as of June 30, the end of its fiscal year. Prepare the necessary June 30 adjusting entry for Louvers by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answers

If Louvers, Inc., accepted a $15,000, 180-day, 10 percent note from a customer on May 31. The necessary June 30 adjusting entry for Louvers will be:

Debit Interest receivable $125

Credit Interest revenue $125

Louvers, Inc. Adjusting Journal entry

Debit Interest receivable $125

Credit Interest revenue $125

($15,000 × 10% × 30/360)

(To record interest receivable)

The Interest amount of $125 calculated as ($15,000 × 10% × 30/360) is due at maturity. Between May 31 and June30, a total of 30 days passed.

Inconclusion the necessary June 30 adjusting entry for Louvers will be:

Debit Interest receivable $125

Credit Interest revenue $125

Learn more here: brainly.com/question/20397637

Answer:

Interest receivable

To Interest revenue

(Being the interest receivable is recorded)

Explanation:

The adjusting entry is as follows

Interest receivable

To Interest revenue

(Being the interest receivable is recorded)

The computation is shown below:

= Principal × rate of interest × number of days ÷ (total number of days in a year)

= $15,000 × 10% × (30 days ÷ 360 days)

= $125

The 30 days is calculated from May 31 to June 30

The Callie Company has provided the following information: Operating expenses were $244,000; Cost of goods sold was $378,000; Net sales were $940,000; Interest expense was $47,000; Gain on sale of a building was $84,000; Income tax expense was $142,000. What was Callie's gross profit

Answers

Answer:

Callie's Gross Profit is $562000

Explanation:

Gross profit is the profit earned by a business after deducting the costs associated with producing or selling its goods (for manufacturing and trading businesses) or the costs associated with providing the services (for service businesses) from the net revenue.

It is the profit from the trading section of the business before deducting the operating and financing expenses of the business and before adding any other income.

The gross profit is simply calculated as follows,

Gross Profit = Net Revenue - Cost of Goods Sold

Callie's gross profit = 940000 - 378000

Callie's Gross Profit = 562000

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Employees were striking at the local university last year. Very few students were crossing the picket line. In fact, the city's postal employees refused to deliver mail there claiming that they were honoring the strike for their fellow service union members. The postal employees were participating in a voluntary secondary boycott.a) trueb) false

Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.97 Baseline Upper K Superscript 0.18. What type of returns to scaleLOADING... does this production function exhibit? In this instance, returns to scale equal nothing. (Enter a numeric response using a real number rounded to two decimal places.) This production function exhibits A. decreasing returns to scale. B. constant returns to scale. C. initially increasing but then constant returns to scale. D. initially constant but then increasing returns to scale. E. increasing returns to scale.