Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.• Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million.• The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30,December 31, March 31, and June 30, with the first payment on September 30, 2024.• Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.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)Required:1. What pretax amounts related to the lease would Abbott report in its balance sheet on December 31, 2024?2. What pretax amounts related to the lease would Abbott report in its income statement for the year ended December 31, 2024?3. What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31,2024?Complete this question by entering your answers in the tabs below.Req 1 and 2What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31,2024?Req 3Note: Note: Enter your answers in whole dollars and not in millions of dollars. Round your intermediate and final answers tonearest whole dollar.Finance leaseInterest portionPrincipal portion$$$6,349,980 significant noncash investing activity236,028 cash inflows from operating activities662,518 cash inflows from investing activitiesShow less

Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. • Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. • Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.

Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. • Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. • Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.

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 June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $403,067 over a five-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $3.40 million. 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) Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? 3. What amount related to the lease would…
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term (also the asset’s useful life), payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc. at a cost of $3 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:1. What pretax amount related to the lease would IC report in its balance sheet at December 31, 2021?2. What pretax amount related to the lease would IC report in its income statement for the year ended December 31, 2021?
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Federated Fabrications leased a tooling machine on January 1, 2024, for a three-year period ending December 31, 2026. . The lease agreement specified annual payments of $34,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2025. . The company had the option to purchase the machine on December 30, 2026, for $43,000 when its fair value was expected to be $58,000, a sufficient difference that exercise seems reasonably certain. . The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's implicit rate of return was 12%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Calculate the amount Federated should record as a right-of-use asset and lease llability for this finance lease. 2. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. 3. Prepare…