Keating Co. is considering disposing of equipment with a cost of $74,000 and accumulated depreciation of $51,800. Keating Co. can sell the equipmentthrough a broker for $33,000, less a 7% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of$49,000. Keating will incur repair, insurance, and property tax expenses estimated at $12,000 over the five-year period. At lease-end, the equipment isexpected to have no residual value. The net differential income from the lease alternative isOa. $4,417Ob. $7,572Oc. $9,465Od. $6,310PreviousNext7:36 PM12/13/2020CPDELL

Keating Co. is considering disposing of equipment with a c through a broker for $33,000, less a 7% broker commissi $49,000. Keating will incur repair, insurance, and property expected to have no residual value. The net differential in Oa. $4,417 Ob. $7,572 Oc. $9,465 Od. $6,310

Keating Co. is considering disposing of equipment with a c through a broker for $33,000, less a 7% broker commissi $49,000. Keating will incur repair, insurance, and property expected to have no residual value. The net differential in Oa. $4,417 Ob. $7,572 Oc. $9,465 Od. $6,310

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Below is information relative to an exchange of equipment by Pensacola Inc. Assume the exchange has commercial substance. Case A Case B Old Equipment Book Value $75,000 $60.000 Old Equipment Fair Value $80,000 $56,000 ECOM dock 13 rations In Case B, Pensacola would record a gain/lloss) of. O $4,000. 0 (54,000. O ($10,000) O None of these answer choices are correct. Cash Received $12,000 $10,000
ANSWER ONLY JOURNAL ENTRIES! ANSWER ONLY JOURNAL ENTRIES! ANSWER ONLY JOURNAL ENTRIES! Question: If the sales price is P1,000,000 which is equal to fair value compute the following under the buyer-lessor accounting Gross Investment Net Investment Unearned Interest Income Journal entries on January 1, 20x1
Statement1: The sale of a residential dwilling by a non-dealer is subject to VAT if the selling price per unit does not exceed P3,199,200 Statement2: The leasing ot residential units is exempt from VAT if the annual rentals do not exceed P15,000 per unita. Both Statements are false b. Both Statements are true c. Statement 1 is true while Statement 2 is false d. Statement 1 is false while Statement 2 is true
Q2. Malama Limited is considering whether to continue the work on an existing contract or to terminate it now and pay an agreed penalty of K90, 000, 000 to the client. This is being considered because the penalty is less than the anticipated contract loss. The following summary has been prepared: Expenditure to date Estimated future costs to completion in one (1) years' time Material Staffing Overheads Estimated total cost Contract value Estimated loss on contract The following information is also available: K'000 other contracts. 80, 000 50,000 90,000 K'000 150,000 220,000 370,000 200,000 80,000 Material Contracts have been exchanged for the purchase of the K60, 000, 000 materials. This is special purpose material which has no alternative use. If not used on this contract it will incur disposal costs of K10, 000, 000. Staffing Two specialists are employed on the contract each at K12, 500, 000 p.a. If the contract was terminated now they would each receive K7,000, 000 redundancy pay.…
1. Lease or Sell Astro Company owns a equipment with a cost of $365,000 and accumulated depreciation of $52,200 that can be sold for $275,000, less a 4% sales commission. Alternatively, Astro Company can lease the equipment to another company for three years for a total of $285,800, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Astro Company on the equipment would total $16,300 over the three years. 2. Discontinue a Segment Product T has revenue of $195,400, variable cost of goods sold of $116,100, variable selling expenses of $33,900, and fixed costs of $58,500, creating a loss from operations of $13,100. Prepare a differential analysis as of May 9, to determine whether Product T should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or…
Lease or Sell Astro Company owns equipment with a cost of $367,300 and accumulated depreciation of $56,100 that can be sold for $273,800, less a 3% sales commission. Alternatively, Astro Company can lease the equipment for 3 years for a total of $285,800, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Astro Company on the equipment would total $15,000 over the 3-year lease. a. Prepare a differential analysis on October 29 as to whether Astro Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) October 29 Lease Sell Line Item Description Equipment Equipment Revenues Costs Profit (Loss) Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) 255,800✔ 273,800 ✓ -12.000 Fandack Check My Work Subtract the lease costs from the lease revenues.…
Lease or sell Plymouth Company owns equipment with a cost of $550,000 and accumulated depreciation of $350,000 that can be sold for $330,000, less a 4% sales commission. Alternatively, Plymouth Company can lease the equipment for four years for a total of $400,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Plymouth Company on the equipment would total $35,000 over the four-year lease. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a differential analysis on August 7 as to whether Plymouth Company should lease (Alternative 1) or sell (Alternative 2) the equipment. Use a minus sign to indicate costs or negative differential effect on income. Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Equipment August 7 Lease…
Quarterly payments: 1st quarter Php 250,000.00 Php 50,000.00 Php 300,000.00 2nd quarter Php 250,000.00 Php 50,000.00 Php 300,000.00 3rd quarter Php 250,000.00 Php 50,000.00 Php 300,000.00 4th quarter Php 250,000.00 Php 50,000.00 Php 300,000.00 Question: How much is the VAT imposable for Client 1? Note: Write only the amount without comma, no peso sign and round off to the nearest peso (e.g. write 100000 only if the answer is One Hundred Thousand Pesos). If your answer is Zero, write 0 only. DO NOT INDICATE ANY NEGATIVE SIGN. 360000
Hrl.1
Lease or Sell Casper Company owns equipment with a cost of $366,800 and accumulated depreciation of $54,900 that can be sold for $277,500, less a 5% sales commission. Alternatively, Casper Company can lease the equipment for three years for a total of $288,100, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Casper Company on the equipment would total $15,800 over the three year lease. a. Prepare a differential analysis on February 18, as to whether Casper Company should lease (Alternative 1) or sell (Alternative 2) the equipment. Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Equipment February 18 Lease Equipment(Alternative 1) Sell Equipment(Alternative 2) Differential Effecton Income(Alternative 2) Revenues Costs Income (Loss) b. Should Casper Company lease (Alternative 1) or sell (Alternative 2) the equipment?
accouting
Janrel Company entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of P2,000,000 was paid as follows: down payment, P400,000, note payable in 3 equal annual installments, P1,200,000, 20,000 ordinary shares with a par value of P25,000 and fair value of P40 per share, P800,00O. Prior to the machine's use, installation cost of P50,000 was incurred. The machine has an estimated residual value of P100,000. What is the initial cost of the machine?