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Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls for Werner to make quarterly lease payments of $424,178, payable each September 30, December 31, March 31, and June 30, with the first payment at September 30, 2021. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at September 30, 2021. 2. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 2021? 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2021? 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2021?

Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls for Werner to make quarterly lease payments of $424,178, payable each September 30, December 31, March 31, and June 30, with the first payment at September 30, 2021. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at September 30, 2021. 2. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 2021? 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2021? 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2021?

FINANCIAL ACCOUNTING
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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0.33 Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls for Werner to make quarterly lease payments of $424,178, payable each September 30, December 31, March 31, and June 30, with the first payment at September 30, 2021. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at September 30, 2021. 2. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 2021? 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2021? 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2021? Complete this question by entering your answers in the tabs below. Req 1 to 3 Determine the present value of the lease payments at September 30, 2021. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 20217 What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 20217 (Round your intermediate and final answers to nearest whole dollar) 1. 2 Req 4 3 Present value of lease payments at Sept 30, 2021 Balance of lease liability at Dec 31, 2021 Balance of right-of-use asset at Dec 31, 2021 Total expenses related to lease for the year ended Dec 31, 2021 Req 4 > Show less A
Transcribed Image Text:0.33 Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls for Werner to make quarterly lease payments of $424,178, payable each September 30, December 31, March 31, and June 30, with the first payment at September 30, 2021. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at September 30, 2021. 2. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 2021? 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2021? 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2021? Complete this question by entering your answers in the tabs below. Req 1 to 3 Determine the present value of the lease payments at September 30, 2021. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 20217 What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 20217 (Round your intermediate and final answers to nearest whole dollar) 1. 2 Req 4 3 Present value of lease payments at Sept 30, 2021 Balance of lease liability at Dec 31, 2021 Balance of right-of-use asset at Dec 31, 2021 Total expenses related to lease for the year ended Dec 31, 2021 Req 4 > Show less A
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