On January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000 for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%, ten periods follows (round to the nearest whole dollar):
Present value of ordinary annuity of $16.71008
Present value of amount of $10.46319
?
?
On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
A. $67,100
B. $70,814
C. $100,000
D. $108,000
Answer: D
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Nevada Enterprises purchased a machine on January 2, 2013 . at a cost of $140,000 . An additional $70,000 was spent for installation, but this amount was charged erroneously to repairs expense. The machine has a useful life of five years and a salvage value of $40,000 . As a result of the error,
a. retained earnings at December 31 . 2014, was understated by $34,000 and 2014 income was overstated by $6,000. b. retained earnings at December 31 . 2014, was understated by $42,000 and 2014 income was overstated by $6,000. c. retained earnings at December 31 . 2014, was understated by $34,000 and 2014 income was overstated by $14,000. d. 2013 income was understated by $70,000.
Two divisions of Central Company (Divisions X and Y) have the same profit margins. Division X's investment turnover is larger than that of Division Y (1.2 to 1.0). Income from operations for Division X is $50,000, and income from operations for Division Y is $38,000. Division X has a higher return on investment than Division Y by:
A) using income from operations as a performance measure B) comparing income from operations C) applying a negotiated price measure D) using its assets more efficiently in generating sales
To initiate a customer relationship management cycle, a company must focus on _____
a. using big data analytics to enhance the collection of customer data b. collecting detailed information about the products and services its customers are using c. identifying profitable and unprofitable customers d. transforming customer data into information that can be used to make managerial decisions
The standard advice of financial analysts has been to buy cash value insurance, because term insurance does not have lasting value
Indicate whether the statement is true or false.