At the beginning of current year, Panorama Company leased a building from a lessor with the following pertinent information: Annual rental payable at the end of each year Initial direct cost paid Lease incentive received Leasehold improvement 1,000,000 400,000 100,000 200,000 Purchase option that is reasonably certain to be exercised 500,000 5 years 8 years 10% 3.79 0.62 Lease term Useful life of building Implicit interest rate PV of an ordinary annuity of 1 for 5 periods at 10% Present value of 1 for 5 periods at 10%

Q: The difference between book value of the asset with the proceeds receive from its sale, with result…

A: Assets:   It refers to the economic value of all resources owned by the business at a given point in…

Q: what do we do with depreciation?

A: Depreciation expense is a non-cash expense that decreases the net income and hence the income tax…

Q: A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX C To…

A: The net capital expenditures are the difference between capital investments and depreciation, and…

Q: What entry is made when selling a fixed asset?

A: Following entry is passed when selling the fixed assets:

Q: What is the classification of long term assets? Explain them.

A: Long-term assets: Long – term assets are those assets that are generally held by a company for more…

Q: Do I have to include depreciation when computing net present value?

A: Depreciation is said to be none cash expense so there is no out flow of cash when depreciation…

Q: What are the effects of depreciation on the profit and loss account and balance sheet?

A: INTRODUCTION: A depreciation plan or chart makes it easier for organizations to keep track of…

Q: How did you calculate your depreciation?

A: MACRS (Modified Accelerated Cost Recovery System) is a depreciation method used for tax purposes,…

Q: ment of a long-term asset, the depreciation of a long-term asset, and the sale of a long-term…

A: The organization would be established for doing business in the market. Thus, it requires a lot of…

Q: How can the Gains and Losses on Depreciable Assets be determined?

A: For calculation of gains or losses on depreciable assets, written down value of the assets at the…

Q: A general description of the depreciation methods applicable to major classes of depreciable assets?

A: Depreciation is the allocation of cost of the asset over the useful life of the asset. Depreciation…

Q: The cost of an asset that is subject to depreciation os called?

A: Assets: Assets are those resources that are owned by the business organization which has an economic…

Q: What is meant by straight line method if charging depreciation?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: What are depreciation and its purpose? Does the book value of a fixed asset (cost minus accumulated…

A: Depreciation is an expense which shows the decrease in the asset's value over the life of the asset…

Q: What factors would result in property increasing in value over a holding period?

A: One holding period is the length of time a creditor retains or the time between purchasing and…

Q: Are Inventories depreciable property? Why?

A: Depreciable property means an asset which is eligible to book depreciation for accounting and tax…

Q: Depreciation expense is used to

A: Depreciation is gradual decrease in the value of asset due to normal wear and tear, obsolescence and…

Q: How do you know the ratesw on straight line depreciation?

A: Solution:- The following way to find depreciation rates on straight line depreciation method as…

Q: What are the requirements of depreciating an asset?

A: Depreciation is a non-cash expense which is charged against the use of the fixed assets of the…