Yes I agree for $30-thirty dollars. 1. Lisas Boutique is renting prime store space at the Regional mall and just signed a five-year lease effective January 1, with the following terms: Refundable security deposit $1,500 Monthly lease payments $3,000 Lease bonus due at signing $18,000 Lisa has had to make significant renovations to the store prior to moving in. The renovations cost $50,000 and have a useful life of 8 years. Lisas Boutique will record occupancy expense for the year ended December 31, of : a) $51,100 b) $49,600 c) $49,900 d) $45,850 2. Quattro Corporation signed a lease from Cinco Leasing Company of July 1 Year 1, for equipment having a five-year useful life. The lease does not include any option to purchase the equipment at the end of the four-year lease term, nor does it include a provision for ownership transfer. Five equal payments of $10,000 per year are required by the term of the lease, with the first payment due upon signing. Quattros incremental borrowing rate is 8%, but its implicit interest rate is unknown. Present value of an annuity at 8% for 5 years = 3.993 Present value of an annuity at 8% for 4 years = 3.312 On its December 31, 20X3 financial statements, Quatto would display the following amounts in the indicated accounts: Equipment ; Accumulated Depreciation; Lease Payable a)$0;$0;$0 b)$43,120; $5,390; $33,120 c)$43,120; $4,312; $33,120 d)$49,930; $6,241; $39,930 3. Bush Corporation signed a lease for equipment from EZ Leasing Company on January 1, Year 1, for a period of ten years at $50,000 per year, including insurance of $3,000 and taxes of $2,000 per year. The equipment had a useful life of fifteen years. At the end of the lease, Bush will have the option of buying the equipment outright for a dollar. Bush's incremental borrowing rate is 8%, and the rate implicit in the lease (which is known to Bush) is 6%. Lease payments are due every year on December 31. The present value of an annuity for various terms and rates are as follows: 6% 8% 10 years 7.360 6.710 15 years 9.712 8.559 On its financial statements for the year ended June 30, Year 1, Bush will display the following: Accumulated Equipment ;Lease Depreciation; Accrued Payable; Interest A) $331,200; $11,040; $331,200; $ 9,936 B) $368,000; $18,400; $306,960; $ 11,040 C) $301.950; $10,065; $301,950; $ 12,078 D) $437,040; $14,568; $331,200 ;$ 9,936 ) 4. Finance Here Sales & Service provides leased-based financing for its full line of commercial generators. Sales of the generators are properly accounted for as operating sales-type leases. Terms of the leases include return of the generators to Finance Here Sales & Service for resale in secondary markets. The company estimates that the non-guaranteed residual values on generators are equal to an average of 10 percent of the historical cost of the generators. Finance Here Sales & Service can expect that: A) Cost of goods sold will be equal to the historical cost of the generators sold. B) Cost of goods sold will be greater than the historical cost of the generators sold. C) Cost of goods sold will be less than the historical cost of the generators sold. D) The relationship of cost of goods sold and the historical cost of the generators cannot be determined. 5.Dean manufacturing is planning to construct expanded facilities and will finance a portion of its new plant with proceeds from the sale of its current plant. To ensure that its operations will not be interrupted, Dean will sell its current plant and lease it back for the estimated 2 year construction pperiod of its new facilities. Deans current plant is estimated to have a useful life of 25 years. Dean bought the plant 9 years ago for $200,000 and the asset has an accumulated depreciation of $140,000. Dean signed an agreement to sell the plant for $350,000 January 1 year 10 and Lease it back for $15,000 per year, deans incremental borrowing rate is 6%. Present value factors for annuity 2 years- 6% =1.833 23years-6%=12.303 25 years-6%=12.783 Dean uses GAAP On its December 31, year 10 financial statements Dean will defer Gain on the sale of its current plant in the amount of? A)$290,000 B)$262,505 C)$27,495 D)$0 6. Septer Corporation issued 2,000 of its $1,000, 8% ten-year bonds dated July 1, Year 1. On September 1, Year 1, at a time when the market paid 9% for bonds of similar risk. The bonds were quoted at 94 and pay interest quarterly on September 30th and December 31st. What were the total proceeds of the bond issue at the time of sale? A. $2,000,000 B. $1,880,000 C. $1,906,667 D. $1,893,333 7. On December 31 year 1 Todd Corporation issued 500 of its 10% $1,000 bonds at 105. Todd Corporation uses IFRS. The bonds were issued through an underwriter to whom Todd paid bond issue costs of $15,000. On December 31 Year 1 balance sheet Todd should report the bond liability at A)$500,000 B)$510,000 C)$515,000 D)$525,000 8. Novastar Corporation issued 2,000 of its 1,000, 10% ten-year bonds dated July 1, Year 1, at a time when the market paid 9% for bonds of similar risk. Interest is payable annually. The bonds were properly carried at $2,134,000 upon issue. On its December 31, Year 1 financial statements, Novastar Corporation would display the following balances: Unamortized Accrued Interest Interest Bonds Payable Premium Payable Expense A. $2,000,000 $126,060 $200,000 $192,060 B. $2,000,000 $130,030 $100,000 $ 96,030 C. $2,000,000 $141,940 $200,000 $192,060 D. $2,000,000 $137,970 $100,000 $ 96,030 9. Capius Corporation issued 2000 bonds in $1000 individual denominations. Each bond has twenty detachable warrants. The bonds and warrants were sold at 110. At the time the bond were issued each warrant had a market value to one percent of the face value of one bond. Capius will account for this transaction as: A)Bond payable with an unamortized premium and a credit to Additional Paid In Capital Warrants B)Bond payable with an unamortized premium and a debit to Additional Paid In Capital Warrants C)Bond payable with an unamortized discount and a credit to Additional Paid In Capital Warrants D)Bond payable with an unamortized discount and a debit to Additional Paid In Capital Warrants 10. On January 1, Year 1, Gearty Corporation loans Olinto Fabrix, Inc. $200,000 with a 10% simple interest note payable in ten years. Interest on the note is payable annually and the principal is due at the end of the term. On January 1, Year 3, Olinto has yet to pay any interest and approaches Gearty in the hope of renegotiating the terms. Gearty agrees, forgives the interest on the note accrued to date, and reduces the interest to 8 percent. The following present value amounts are available. Present Value of $1 Present Value of an Annuity 8% 10% 8% 10% Eight years .540 .467 5.767 5.335 Ten years .463 .386 6.710 6.145 As a result of this troubled debt restructuring, Gearty should record: A) An extraordinary loss of $39,900. B) An extraordinary loss of $56,100. C) Bad debt expense of $64,480. D) A valuation allowance of $61,240.
Paper#10996 | Written in 18-Jul-2015Price : $25