
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 20, Problem 1C
1.
To determine
Explain the reasons for leasing the electric car by the drivers.
2.
To determine
Explain the reasons for leasing the electric car at higher rate than others by the drivers.
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Summary information from the financial statements of two companies competing in the same industry follows.
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Barco
Kyan Company
Company
Data from the current year-end
balance sheets
Data from the current year's income
statement
Assets
$ 810,000
$ 886,200
Cash
$ 18,500
$ 32,000
Accounts receivable, net
36,400
84,340
590,100
7,600
644,500
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Current liabilities
Long-term notes payable
Common stock, $5 par value
Retained earnings
Total liabilities and equity
6,100
330,000
52,400
132,500
7,600
305,400
$ 475,340 $ 529,900
Sales
Cost of goods sold
Interest expense
Income tax expense
Net income
Basic earnings per share
Cash dividends per share
Beginning-of-year balance sheet data
Accounts receivable, net
Merchandise inventory
Total assets
$ 71,340
82,800
$ 98,300
117,000
170,000
151,200
226,000
88,600
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Question: Record the purchase of equipment in a general journal format.
• July 1, 2021- Signed a lease for an office and issued Check 101 for $15,600 to pay the rent in advance for six months. • July 1, 2021- Borrowed money from Bancorp West by issuing a four-month, 4.5 percent note for $40,000; received $39,400 because the bank deducted the interest in advance. • July 1, 2021- Signed an agreement with Johnson Ventures to provide financial services for one year at $6,000 per month; received the entire fee of $72,000 in advance. The $72,000 was credited to Unearned Financial Service Fees. • July 1, 2021- Purchased office equipment for $15,900 from Office Outfitters; issued a two-month, 6 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,500 salvage value. The equipment will be depreciated using the straight-line method. • July 1, 2021- Purchased a one-year insurance policy and issued Check 102 for $1,860 to pay the entire…
Chapter 20 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 20 - Prob. 1GICh. 20 - List four potential benefits to the lessor of...Ch. 20 - Prob. 3GICh. 20 - What is a substitution right, and when does that...Ch. 20 - Prob. 5GICh. 20 - List the five criteria used to determine if a...Ch. 20 - Prob. 7GICh. 20 - Prob. 8GICh. 20 - Describe briefly the procedures followed by the...Ch. 20 - Owens Company leased equipment for 4 years at...
Ch. 20 - Describe the difference between how a lessee would...Ch. 20 - Prob. 12GICh. 20 - What is the basic difference between the...Ch. 20 - Why are compound interest concepts appropriate and...Ch. 20 - Describe briefly the accounting procedures...Ch. 20 - Prob. 16GICh. 20 - Prob. 17GICh. 20 - Which of the following should be included by the...Ch. 20 - East Company leased a new machine from North...Ch. 20 - Prob. 3MCCh. 20 - Fox Company, a dealer in machinery and equipment,...Ch. 20 - Fox Company, a dealer in machinery and equipment,...Ch. 20 - In the third year of a 6-year finance lease, the...Ch. 20 - Prob. 7MCCh. 20 - At its inception, the lease term of Lease G is 65%...Ch. 20 - Rent received in advance by the lessor for an...Ch. 20 - On August 1, 2019, Kern Company leased a machine...Ch. 20 - Next Level Keller Corporation (the lessee) entered...Ch. 20 - Use the information in RE20-1. Prepare the journal...Ch. 20 - Next Level Garvey Company (the lessee) entered...Ch. 20 - Use the information in RE20-3. Prepare the journal...Ch. 20 - Use the information in RE20-3. Prepare the journal...Ch. 20 - Montevallo Corporation leased equipment from Folio...Ch. 20 - Use the information in RE20-6. However, assume...Ch. 20 - Use the following information to decide whether...Ch. 20 - Use the information in RE20-3. Prepare the journal...Ch. 20 - Determining Type of Lease and Subsequent...Ch. 20 - Lessee Accounting with Payments Made at Beginning...Ch. 20 - Lessee Accounting Issues Sax Company signs a lease...Ch. 20 - Lessee Accounting for Finance Lease On January 1,...Ch. 20 - Prob. 5ECh. 20 - Lessor Accounting Issues Ramsey Company leases...Ch. 20 - Lessor Accounting with Receipts at End of Year...Ch. 20 - Lessor Accounting with Unguaranteed Residual Value...Ch. 20 - Lessor Accounting with Guaranteed Residual Value...Ch. 20 - Determining Type of Lease and Subsequent...Ch. 20 - Guaranteed and Unguaranteed Residual Values...Ch. 20 - Lessor Accounting Issues Rexon Company leases...Ch. 20 - Lessee and Lessor Accounting Issues Diego Leasing...Ch. 20 - Lessee and Lessor Accounting Issues The following...Ch. 20 - Lease Income and Expense Reuben Company retires a...Ch. 20 - Determining Type of Lease and Subsequent...Ch. 20 - Determining Type of Lease and Subsequent...Ch. 20 - Accounting for Leases by Lessee and Lessor Scupper...Ch. 20 - Lessee Accounting Issues Timmer Company signs a...Ch. 20 - Sales-Type Lease with Guaranteed Residual Value...Ch. 20 - Sales-Type Lease with Unguaranteed Residual Value...Ch. 20 - Sales-Type Lease with Receipts at End of Year...Ch. 20 - Initial Direct Costs and Related Issues On January...Ch. 20 - Various Lease Issues for Lessor and Lessee Lessee...Ch. 20 - Prob. 10PCh. 20 - Various Lease Issues Farrington Company leases a...Ch. 20 - Comprehensive Landlord Company and Tenant Company...Ch. 20 - Prob. 1CCh. 20 - Identified Asset A customer enters into a 3-year...Ch. 20 - Prob. 3CCh. 20 - Types of Leases On January 1, Hazard Company, a...Ch. 20 - Initial Direct Costs Efland Company leases...Ch. 20 - Prob. 6C
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- Question: Record the fees received in advance in a general journal format. • July 1, 2021- Signed a lease for an office and issued Check 101 for $15,600 to pay the rent in advance for six months. • July 1, 2021- Borrowed money from Bancorp West by issuing a four-month, 4.5 percent note for $40,000; received $39,400 because the bank deducted the interest in advance. • July 1, 2021- Signed an agreement with Johnson Ventures to provide financial services for one year at $6,000 per month; received the entire fee of $72,000 in advance. The $72,000 was credited to Unearned Financial Service Fees. • July 1, 2021- Purchased office equipment for $15,900 from Office Outfitters; issued a two-month, 6 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,500 salvage value. The equipment will be depreciated using the straight-line method. • July 1, 2021- Purchased a one-year insurance policy and issued Check 102 for $1,860 to pay the…arrow_forwardQuestion: Record the payment of rent in a general journal format using the information below. July 1, 2021- Signed a lease for an office and issued Check 101 for $15,600 to pay the rent in advance for six months. • July 1, 2021- Borrowed money from Bancorp West by issuing a four-month, 4.5 percent note for $40,000; received $39,400 because the bank deducted the interest in advance. • July 1, 2021- Signed an agreement with Johnson Ventures to provide financial services for one year at $6,000 per month; received the entire fee of $72,000 in advance. The $72,000 was credited to Unearned Financial Service Fees. • July 1, 2021- Purchased office equipment for $15,900 from Office Outfitters; issued a two-month, 6 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,500 salvage value. The equipment will be depreciated using the straight-line method. • July 1, 2021- Purchased a one-year insurance policy and issued Check 102 for $1,860…arrow_forwardQuestion: Record the borrowing in a general journal format. • July 1, 2021- Signed a lease for an office and issued Check 101 for $15,600 to pay the rent in advance for six months. • July 1, 2021- Borrowed money from Bancorp West by issuing a four-month, 4.5 percent note for $40,000; received $39,400 because the bank deducted the interest in advance. • July 1, 2021- Signed an agreement with Johnson Ventures to provide financial services for one year at $6,000 per month; received the entire fee of $72,000 in advance. The $72,000 was credited to Unearned Financial Service Fees. • July 1, 2021- Purchased office equipment for $15,900 from Office Outfitters; issued a two-month, 6 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,500 salvage value. The equipment will be depreciated using the straight-line method. • July 1, 2021- Purchased a one-year insurance policy and issued Check 102 for $1,860 to pay the entire premium. •…arrow_forward
- I need the correct answer to this general accounting problem using the standard accounting approach.arrow_forwardHello tutor please given General accounting question answer do fast and properly explain all answerarrow_forwardLekin Industries has complied the following cost data for January.arrow_forward
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