On January 1, 2014, Bullitt Corporation sold a machine to Sting Corporation and simultaneously leased it back for ten years. The following information is available regarding the lease: Estimated remaining useful life at December 31, 2013 10 years Sales price 90,000 Carrying value at December 31, 2013 52,500 Annual rental under leaseback 14,600 Interest rate implicit in the lease 10%
What will be an ideal response?
Ans: Present value of the lease rentals 89,711 ($14,600 for 10 years at 10%) How much profit should Bul-litt recognize on January 1, 2014, on the sale of the machine? a. $0.
You might also like to view...
A marketing research company asked members of a focus group to describe several brands as animals. The purpose of the request is to measure the prestige of the various brands. This is an example of ________
A) brand strength analysis B) interpretive consumer research C) quantitative research D) buzz marketing E) brand extension
Mass service is characterized by ______.
A. high variety B. high volume C. low cost D. extensive customization
A(n) ________ is used to determine the net worth of a business
A) business statement B) income statement C) capitalization statement D) cash-flow statement E) balance sheet
Which does not make owning a home relatively more attractive than renting?
A) An increase in the rate of return on financial investments B) An increase in your marginal tax rate C) An increase in the expected future price of housing D) A reduction in mortgage interest rates