Avionics Inc, a dealer in machinery and equipment, leased equipment to Benchmark Products on July 1 . 2014 . The lease is appropriately accounted for as a sale by Avionics and as a purchase by Benchmark. The lease is for a ten-year period (the useful life of the asset) expiring June 30, 2021 . The first of ten equal annual payments of $250,000 was made on July 1 . 2014 . Avionics had purchased
the equipment for $1,337,500 on January 1 . 2014, and established a list selling price of $1,687,500 on the equipment. Assume that the present value at July 1 . 2014, of the rent payments over the lease term discounted at 1 . percent (the appropriate interest rate) was $1,582,500 . What is the amount of profit on the sale and the amount of interest income that Avionics should record for the year ended December 31 . 2014?
a. $245,000 and $94,950
b. $245,000 and $79,950
c. $350,000 and $79,950
d. $350,000 and $94,950
B
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Yankton Company began the year without an investment portfolio. During the year, they purchased investments classified as trading securities at a cost of $13,000 . At the end of the year, the market value of the securities was $11,000 . The Yankton Company's financial statements for the current year should show
a. a loss of $2,000 on the income statement and net trading securities of $13,000 on the balance sheet b. no loss on the income statement and net trading securities of $13,000 on the balance sheet c. no loss on the income statement, net trading securities of $11,000, and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet d. a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet
To wrap up the textbook, it states that knowing how to manage others and your own __________________ lies at the heart of your future career success.
a. Behavior b. People c. Relatives d. Children
William has been a company officer with Vitte Glass House for the last five years. He has never been considered for promotions even though he is qualified for it. He has decided to bring suit under Title VII of the Civil Rights Act of 1964. Describe the steps that William should take to establish a prima facie case of discrimination.
What will be an ideal response?
What is the firm's marginal profit contribution from sales under the proposed plan of initiating the cash discount? (See Table 14.7)
A) $22,500 B) $40,000 C) $62,500 D) $100,000