NEW Co. leased an office and paid $20,000 forleasehold improvements in January of this year.This cost included drywall, new carpets, and allnew lighting fixtures. The term of the lease is 2years plus an option to renew for 2 more years.Required:Calculate the maximum CCA that NEW Co. will beallowed to deduct this year. (Show calculationsand the process of arriving at your answer.)

1. Determine the CCA class: Leasehold improvements fall under Class 13 for tax purposes in Canada.2.…

Answered: NEW Co. leased an office and paid…

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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For his business, Nicholas leased equipment valued at $19,000. The terms of the lease required payments of $1550 every month. If the first payment is due eighteen months after the lease was signed and interest is 5% compounded semi-annually, what is the term of the lease? State your answer in years and months (from 0 to 11 months).
On December 31, 2013, Corporation A leased equipment to Company B for a five-year period. The annual lease payment, excluding executory costs is $42,000. The interest rate for this lease is 10%. The payments are due on December 31 of each year. The first payment was made on December 31, 2013. The normal cash price for this type of equipment is $150,000 while the cost to Corporation A was $118,000. For the year ended December 31, 2013, by what amount will Corporation A's pretax earnings increase from this lease?
Apolonia Place is an office building that has recently been put up for sale. It is rented by one tenantwho has ten years remaining on their lease. The rent for years 1-3 has been fixed at ¢300,000 perannum, the rent for years 4-6 is fixed at ¢420,000 per annum and the rent for years 7-10 has beenfixed at ¢510,000 per annum. The rent is payable annually and in arrears. When the lease ends, itis forecast that the property will sell for ¢2 million. The property is currently being advertised for¢2.7 million and the landlord has already paid an advertisement cost of ¢500,000. The risk oninvestment of this kind is currently 12%.(a) Calculate the payback of the investment and comment on your results.(b) Calculate the NPV of the investment and comment on your results.(c) Calculate the IRR of the investment and comment on your results.(d) Your client, Mr. Yeboah, has approached you that he wants to purchase Apolonia Place andanticipates that he can use 5 years to recoup his investment. Prior to…
Crestfield leases office space. On January 3, the company incurs $26,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 5 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?
LMO Company incurred expenditures for leasehold improvements during the year. The relevant lease is on an office building that the Company rented at the beginning of 2021. The improvements cost $90098. The lease's initial term is 6 years, with an option to renew for another 2 years. The company had a profit before CCA on these leasehold improvements of $707467. What would be the maximum amount of CCA the company could deduct in 2021?
An appraiser is looking for comparable sales and finds a property that recently sold for $224, 000. She finds that the buyer was able to assume the seller's fully amortizing mortgage, which had monthly payments based on a 7 percent interest. The balance of the loan at the time of sale was $148, 000 with a remaining term of 15 years (monthly payments). The appraiser determines that if a $148, 000 loan was obtained on the same property, monthly payments at the market rate for a 15-year fully amortizing loan would have been 8 percent with no points. Required: a. Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the cash equivalent value of the property? b. What is the cash equivalent value of the property if you assumed that the buyer is only expected to benefit from interest savings for five years because he would probably sell or refinance after five years? Use excel spreadsheet to show work and provideanswer.
Please answer in good accounting form. Thanks! On January 1, 2020, EEE Corp. leased a warehouse for 5 years at an annual rental of ₱575,000 payable every December 31. The equipment had an estimated life of 8 years and shall revert back to the lessor at the expiration of the lease term. The lessee paid the lessor a lease bonus of ₱250,000 and was also responsible as per the lease agreement to pay the broker fees and commission amounting to ₱180,000. As an incentive however, the lessor shall reimburse EEE Corp. 75% of the said initial direct cost. The implicit lease rate known to both parties was at 12% while EEE Corporation’s incremental borrowing rate was at 10%.Requirements: (Use a PV FACTOR rounded off to 4 decimal places) 8. Depreciation expense on the Right of Use Asset in 2020 (under Straight Line Method)9. Carrying value of the Right of Use Asset as of December 31, 2021
Mr. Harrington had a new heating system installed in his office. The balance owing to the heating company is $40,000 which includes equipment and installation fees. The heating company has agreed to let him make individual payments on the account whenever he’d like, but the final balance must be paid two years (24 months) from now. Starting today, interest will accumulate on the balance at 3.45% compounded monthly. Mr. Harrington will make a payment of $8000 4 months from now and $6000 19 months from now. What is the final balance owing on the account in two years (24 months from now)?
Year 1, 2, 3, and 4 total expenses are $200,000, $210,000, $225,000, and $240,000, respectively. A tenant signs a lease at the start of the second year, occupies 35% of the rentable area and has base year stop for recoveries. What will the expense recovery for this tenant be in year 3?
PLEASE ANSWER IN GOOD ACCOUNTING FORM. THANK YOU.
A 1,000-square-foot office space is leased at $15.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gross with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. The lease provides for two months of free rent at the end of the lease term. If the lease term is three years and the discount rate is 10 percent, what is the effective rent per square foot?

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