Hayes Corp. is a manufacturer of truck trailers. On January 1, 2021, Hayes Corp. leases ten trailers to Lester Company under a six-year non-cancelable lease agreement. The following information about the lease and the trailers is provided: 1) Annual payment of $120,175 is due on January 1, 2021 and at December 31 from 2021 to 2025. Hayes Corp. has an implicit rate of 8% (present value factor for 6 periods at 8% is 4.99271). 2) Titles to the trailers pass to Lester at the end of the lease. 3) The fair value of each trailer is $60,000. The cost of each trailer to Hayes Corp. is $54,000. Each trailer has an expected useful life of nine years. 4) Collectibility of the lease payments is probable. Instructions (a) What type of lease is this for the Lester Company and Hayes Corp? (b) Prepare a lease amortization schedule for Lester Company till 12/31/2021. (c) Prepare the journal entries for Lester Company on 1/1/2021 and 12/31/2021. Round all amounts to the nearest dollar.
Answers
Answer:
FINANCING LEASE.
trailer 600,000 debit
lease liability 479,825 credit
cash 120,175 credit
--to record Jan 1st entry--
interest expense 38,386 debit
lease liability 81,789 credit
cash 120,175 credit
--to record Dec 31st entry--
Explanation:
The lease is for more than half of the asset useful life. Also, it has a present value equal to the fair value of the trailer. Also, ownership is acquired at the end of the lease life.
To build the schedule we calculate the interest on the principal
then, we subtract that from the installment to get the principal amortization and solve for the remaining at year-end
we repeat this procedure during the life of the lease.
Jan 1st, 2021
the journal entries will recognize the lease liability, the cash from the first payment, and the trailers received
Dec 31st, 2021
Here we must recognize the interest expense as well as the decrease in the lease liability.
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9. Two countries: US and Mexico. Two goods: Airplane and car. A US worker's MPL is 20 times higher than a Mexican worker in making an airplane. A US worker's MPL is 5 times higher than a Mexican worker in making a car. Which country has absolute advantage in making cars and why
One year ago, you purchased 200 shares of Southern Foods common stock for $7900. Today, you sold your shares for $35.40 a share. During this past year, the stock paid $1.25 in dividends per share. What is your percent return on this investment
(B) Operating Activity $16,000
(C) Financing Activity of $161,000
(D) B and C
Answers
Answer:
(C) Financing Activity of $161,000
Explanation:
Financing activities: It records those activities which affect the long term liability and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption and dividend is an outflow of cash.
The missing information is below the question in ask for details
Cash flow from Financing activities
Issue of common stock $144,000 ($159,000 - $15,000)
Issue of treasury stock $17,000 ($110,000 - $93,000)
Net Cash flow from Financing activities $161,000
Final answer:
The statement of cash flows with the indirect method will report on operating and financing activities, but given the lack of details in the question, it is impossible to confirm whether the operating activity of $16,000 or financing activity of $161,000 or both are reported.
Explanation:
The student inquired about what is reported on the statement of cash flows prepared with the indirect method as of December 31, 2020. Given there were no transactions involving common stock or Treasury Stock, and no dividends were declared, the potential activities reported would pertain to either operating activities or financing activities. Since the question does not provide specific details about the company’s cash flows from operating activities or financing activities, it is not possible to accurately determine whether option B ($16,000 Operating Activity) or C ($161,000 Financing Activity) is included in the statement of cash flows. Therefore, the question cannot be conclusively answered without additional details. It would be necessary to have the company’s income statement and changes in working capital to determine the cash flows from operating activities, as well as details on any loans or other financing activities to report financing activities.
Learn more about Statement of Cash Flows here:
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Answers
Answer:
Weighted average contribution margin= $44.29
Explanation:
Giving the following information:
Sales proportion:
Product A= 5/7= 0.714
Product Z= 2/7= 0.286
Product A sells for $75; Z sells for $95.
Variable costs for product A are $35; for Z $40.
To determine the contribution margin per composite unit, we need to use the following formula:
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= (0.714*75 + 0.286*95) - (0.714*35 + 0.286*40)
Weighted average contribution margin= 80.72 - 36.43
Weighted average contribution margin= $44.29
Answers
"There are fewer close substitutes for the product your team supports" will improve your bargaining position with customers.
Option: B
Explanation:
Bargaining is the procedure which is preferred by citizens not only with street shops but it is famous internationally too, where defense, economic trade deal, etc are signed between two different nations to corporate and shake hand of unity. Bargaining is more effective when one allow seller to know that the party itself have more substitutes if the product is not provided by the seller in appropriate rate.
For an instance, if India need to buy some rolling defense helicopters for nation from Russia but prices are high and United States is providing same material with lower price or may be with better rewards on buying from them.
B) Optimal price increases, optimal quantity remains unchanged.
C) Optimal price increases, optimal quantity decreases.
D) Optimal price and quantity decline.
Answers
As the marginal external cost curve rises, it suggest that marginal returns are falling. Therefore, Optimal price increases, optimal quantity decreases.
So, the correct option is C.
When one factor of production increase while the others remain constant, productivity decreases. This is known as diminishing marginal return.
The decline in productivity levels in this scenario is a result of the marginal external cost of pollutants growing with the quantity of plastics, resulting in optimal price increase and optimal quantity decrease.
To know more about, Marginal External cost curve, refer to the link:
Answer:
The answer is option C) What happens to the socially optimal level of output and market price if the marginal external cost curve shifts upward is Optimal price increase and optimal quantity decrease.
Explanation:
when marginal external cost curve shifts upward, it indicates diminishing marginal returns.
A diminishing marginal return occurs when increases in one factor of production while the others remain constant results in increasingly reduced productivity.
In this scenario, the decrease in productivity levels is a response to the marginal external cost of the pollutants increasing with the quantity of plastics thereby causing optimal price increase and optimal quantity decrease.
Answers
Answer:
Selection of Concept with its Best Description:
Concept Best Description
4. Total quality management Focuses on quality throughout the
production process
3. Customer orientation Flexible product designs can be modified
to accommodate customer choices.
2. Continuous improvements Every manager and employee constantly
looks for ways to improve company
operations.
5. Triple bottom line Reports on financial, social, and
environmental performance.
1. Just-in-time manufacturing Inventory is acquired or produced only
as needed.
Explanation:
1. Just-in-time manufacturing reduces manufacturing flow times and suppliers' and customers' response times. The purpose is to reduce waste and continuously improve operations.
2. Continuous improvement is a business approach that focuses on incremental or breakthrough improvement of processes, services, or products.
3. Customer orientation: An organization that has customer orientation focuses on the customer first and tries to satisfy the customer before meeting its own needs.
4. Total quality management: This is a management strategy whereby all members of the organization improve customer services, processes, products, and organizational culture in order to achieve long-term success.
5. Triple bottom line (TBL): To create greater business value, some organizations adopt the TBL performance evaluation framework, with a focus on social, environmental (or ecological) and financial performance.
b. has one hundred or more employees.
c. consents.
d. acted with malice or reckless indifference.
Answers
Answer: Acted with mallice and reckless indifference
Explanation: As per the legislations passed under Civil rights act, to recover the damages beyond simple compensation, in case of discrimination at work place by the employer, the act done must be reckless indifference like deliberate partial behavior on the basis of gender or race.