19. KAPIT LANG CEREBELLUM leased a new machine to MALAPIT NA ANG FINISH LINE on January 01, 2012. The lease expires on January 01, 2017. Annual rental is P900,000. Additionally, on January 01, 2012, MALAPIT NA ANG FINISH LINE paid P500,000 to KAPIT LANG CEREBELLUM as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. In KAPIT LANG CEREBELLUM's 2012 statement of comprehensive income, the amount of rental revenue should be a. P1,400,000 O b. P1,250,000 c. P1,000,000 O d. P900,000

19. KAPIT LANG CEREBELLUM leased a new machine to MALAPIT NA ANG FINISH LINE on January 01, 2012. The lease expires on January 01, 2017. Annual rental is P900,000. Additionally, on January 01, 2012, MALAPIT NA ANG FINISH LINE paid P500,000 to KAPIT LANG CEREBELLUM as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. In KAPIT LANG CEREBELLUM's 2012 statement of comprehensive income, the amount of rental revenue should be a. P1,400,000 O b. P1,250,000 c. P1,000,000 O d. P900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2022, ABC Company signed a 5-year non-cancelable lease for a building. This is also the period when the contract is enforceable.The terms of the lease called the ABC to make annual payments of P500,000 at the beginning of each year starting January 1, 2022. The contract provides that ABC will obtain the ownership at the end of the lease term. The building has an estimated useful life of 6 years and a P120,000 guaranteed residual value at the end of the five-year lease term. ABC has a constructive obligation to restore the machine to a condition still suitable for use at the end of the lease term. Estimated cost of restoration is P200,000. ABC incurred directly attributable cost of P90,000 to install the machine. The rate implicit in this contract is not readily determinable at the time of inception of the contract and incremental borrowing rate is at 9%. How much depreciation expense will be taken up by ABC?
Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $78,000 under a 5-year lease on December 20, 2022. The lease commences on January 1, 2023, and Leewin will return the automobile to Bumble on December 31, 2027. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $10,700 on December 20, 2022. In addition, the lease agreement stipulates annual payments of $10,700, due on January 1 of 2023, 2024, 2025, 2026, and 2027. The implicit rate of the lease is 4% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $2000.Assuming that this is classified as an operating lease, how much interest expense is recorded in 2023? Group of answer choices $1554 $2140 $0 $1982
19 On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $125,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,214,031 lease liability. Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
I MISS HIGH SCHOOL INC. leased a machine from ANYARE SA COLLEGE LTD. on January 01, 2019. The first annual payment was made on January 01, 2020. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. At the end of the lease term, the machine will be returned to ANYARE SA COLLEGE LTD. A residual value in the amount of P5,000 has been guaranteed by I MISS HIGH SCHOOL INC. Interest implicit in the lease is 10% which is known to I MISS HIGH SCHOOL INC.Round present value factors to five decimal places. How much annual depreciation expense should I MISS HIGH SCHOOL INC. record? a. P24,628 b. P16,419 c. P23,378 d. P15,585
N1. Account
10. On 1 July 2008, Copper Coin Ltd leased a photocopier from Silver Note Corp., a company that manufactures, retails and lease copiers. The photocopier has cost Silver Note Corp. $30,000 to make but had a fair value on 1 July 2008 of $35,080. The lease agreement contained the following provisions: Lease term 3 years Annual payment, payable in advance on 1 July each year $ 14,500 Economic life of the copier 4 years Estimated residual value at the end of the lease term when the $3,000 copier is returned to Silver Note Corp. Residual value guaranteed by Copper Coin $ 1,500 Interest rate implicit in the lease 10% The lease is cancellable, provided another lease is immediately entered into. The annual payment included an amount of $2,500 p.a. to reimburse Silver Note Corp. for the cost of paper and toner supplied to Copper Coin Ltd. Silver Note Corp.'s solicitor prepared the lease agreement for a fee of $1,365. On 30 June2011, at the end of the lease term, Copper Coin Ltd retuned the…
13. Concord Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $162,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $54,800 payable each December 31, beginning December 31, 2019. An interest rate of 6% is implicit in the lease agreement. Collectibility of the rentals is not probable.Prepare any journal entry for Concord on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
7
Rajiv Industries leased exercise equipment to Woodson Gyms on July 1, 2024. Rajiv recorded the lease receivable at $810,000, the present value of lease payments discounted at 10% and fair value of the equipment. The lease called for ten annual lease payments of $120,000 due at the beginning of each year. The first payment was received on July 1, 2024. Rajiv had manufactured the equipment at a cost of $750,000. With this lease agreement, control is considered to be transferred to the lessee at the beginning of the lease. What is the total increase in earnings (pretax) on Rajiv’s 2024 income statement?