Maharaj Garage & Car Supplies sells a variety of automobile cleaning gadgets including a variety of hand vacuums. The business began the first quarter (January to March) of 2024 with 20 (Mash up Dirt) deep clean, cordless vacuums at a total cost of $126,800. During the quarter, the business completed the following transactions relating to the “Mash up Dirt” brand. January 8 105 vacuums were purchased at a cost of $6,022 each. In addition, the business paid a freight charge of $518 cash on each vacuum to have the inventory shipped from the point of purchase to their warehouse. January 31 The sales for January were 85 vacuums which yielded total sales revenue of $768,400. (25 of these units were sold on account to Mandys Cleaning Supplies, a longstanding customer) February 4 A new batch of 65 vacuums was purchased at a total cost of $449,800 February 10 8 of the vacuums purchased on February 4 were returned to the supplier, as they were either not of the model ordered or were not…

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Zanzibar Limited entered into a lease agreement on July 1 2016 to lease some highly customized hydraulic equipment to Kaizen Limited. The fair value of the equipment as at that date was $700,000. The terms of the lease agreement were: Lease term Equipment economic life Annual rental payment, in arrears (commencing June 30th 2017) Equipment residual value Guaranteed residual value by Zanzibar Incremental borrowing rate 5 years 6 years $160,000 $100,000 $60,000 8% Interest rate implicit in the lease 6% Note: the lease is cancellable but only with Zanzibar's permission At the end of the lease term, the equipment is to be returned to Zanzibar Limited. On July 1, 2016, Zanzibar incurred $12,000 in legal fees for setting up the lease. The annual rental payment includes $10,000 to reimburse the lessor for maintenance fees incurred on behalf of the lessee. Requirements: a) Discuss the nature of the lease using the appropriate criteria. Justify your answer using calculations where applicable b)…