Answered: me is compelled to pay the penalty of…

me is compelled to pay the penalty of ½ of 1% per day for the first 6 days of the extra time required, and for each additional day thereafter, the stipulated penalty is increased by 10% each day. If

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, SaLow Company enters into a contract to provide custom-made equipment to ByHi Corporation for $100,000. The contract terms allow cancellation without penalty by either party at any time prior to delivery of the goods. The contract specifies a delivery date of March 15 but the equipment was not delivered until April 10. The contract required full payment within 30 days after delivery. When should revenue be recognized for this contract? April 10 March 15 Never, because it includes a termination agreement. May 10
6. Cheyenne Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $276,779, and its unguaranteed residual value at the end of the lease term is estimated to be $18,400. National will pay annual payments of $39,900 at the beginning of each year. Cheyenne incurred costs of $189,300 in manufacturing the equipment and $3,700 in sales commissions in closing the lease. Cheyenne has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 10%.Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor.This is a .Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g.…
On 12-31-21, Austin entered into an agreement that required Austin to pay a supplier $4,000 every year on 12-31 until 12-31-30. The agreement required Austin to make the first annual payment on 12-31-24. Assume the market rate of interest for Austin is 6%. As of 12-31-21 what was the present value of Austin's obligation?
ABC Inc, a telecommunications operator, entered into a contract with Mr. X on March 1, 20x2. In line with the contract, Mr. X will subscribe to ABC Inc's monthly plan for 12 months and in return Mr. X receives a free cellphone from ABC Inc. Mr. X will pay a monthly fee of P5,000. Mr. X will get immediately the handset after the contract signing. ABC Inc sells the same handset for P26,000 and the same monthly plan for P3,250 per month without the handset. Determine the revenue to recognized by H Inc. on April 30, 20x7. [A] 27,000 [B] 5,000 [C] 3,250 [D] 3,000
Mandren Inc. has a fire insurance policy from the Blundi Insurance Company with a 90% coinsurance clause based on replacement cost. The replacement cost of the building is $600,000. The face amount of the policy Mandren purchases is $400,000. If a covered loss in the amount of $550,000 occurs, how much will Mandren collect from their insurer?
A contracting firm anticipates that it will incur costs in excess of the contract price on a particular contract. The firm has completed two years of work but the contract is only 60% complete. What portion of the entire anticipated loss is recognized as of the end of the second year? Which section of the authoritative literature best describes this situation and provides the appropriate guidance?
VS Co. has experienced tough competition, leading it to seek concessions from its employees in the company's pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees agreed to receive lower pension benefits in the future. As a result, VS Co. amended its pension plan on January 1, 2019, and recorded negative past service cost of €125,000. The average period to vesting for the benefits affected by this plan is 5 years. Current service cost for 2019 is €26,000. Interest expense is €9,000, and interest revenue is €2,500. Actual return on assets in 2019 is €1,500. Compute pension expense for VS Co. in 2019. O a. (€92,500) O b. (€99,000) €99,000 O d. €92,500
On April 1st, Tesla entered into a contract of one-month duration to build a barn for Amazon. Tesla is guaranteed to receive a base fee of $5,300 for his services in addition to a bonus depending on when the project is completed. Amazon created incentives for Tesla to finish the barn as soon as he can without jeopardizing the structural integrity of the barn. Amazon offered to pay an additional 30% of the base fee if the project finished 2 weeks early and 10% if the project finished a week early. The probability of finishing 2 weeks early is 30% and the probability of finishing a week early is 60%. What is the expected transaction price with variable consideration estimated as the expected value? Multiple Choice O $5,300 O $7,095 O $5,035 $6,095 G
Smith, the lessee, signs an eight-year lease agreement on December 31 for the floor of a building that requires annual payments of $70,000, beginning immediately. The residual value of $50,000 is guaranteed to the lessor at the end of the lease term. Smith estimates a residual value of $30,000 at the end of the lease term. Smith is aware of the lessor's implicit rate of interest of 7%. rate of interest of 7% Prenare the leccor's inurnal entries on December 31 to record the (1) leace receivable and (2) receint of the first navment assuming that the lease is properly classified as a sales-type lease. The carrying value of the equipment is $450,000 at the commencement of the lease. N Note: Round your answers to the nearest whole dollar. = Nare' koung your answers in the nearest wanie nnuar Date TIDEL. SI 1) Dec. 31 2) Dec. 31 Account Name To derecognize asset and record investment in lease To record receipt of lease payment ======== Dr. Cr.
Smith, the lessee, signs an eight-year lease agreement on December 31 for the floor of a building that requires annual payments of $280,000, beginning immediately. The residual value of $200,000 is guaranteed to the lessor at the end of the lease term. Smith estimates a residual value of $120,000 at the end of the lease term. Smith is aware of the lessor's implicit rate of interest of 7%. Prepare the lessor's journal entries on December 31 to record the (1) lease receivable and (2) receipt of the first payment, assuming that the lease is properly classified as a sales-type lease. The carrying value of the equipment is $1,800,000 at the commencement of the lease. Note: Round your answers to the nearest whole dollar. Date 1) Dec. 31 Account Name: Dr. Cr. 0 0 0 0 0 0 0 0 To derecognize asset and record investment in lease 2) Dec. 31 0 0 00 To record receipt of lease payment
A contract between two parties (company X & Y) was created such that in return for services rendered, company X would provide payments of $15,000 in 8 months, $35,000 in 16 months, and $40,000 in 24 months. However, a clause was inserted in the contract that allowed company X to pay two equal lump sum payments in months 30 and 36. If interest on the contract is 6.5% compounded annually, determine the value of the lump sum payments that should be written in the contract. When entering your answer, round your values to two decimal places, and use a $ symbol as well as the correct comma separator. For example $12,345.67 Answer: Answer
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