At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $32,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $243,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $73,596.) Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease.

Required:
a. What will be the effects of the lease on Crescent's (lessor's) earnings for the first year (ignore taxes)?
b. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent (ignore taxes)?

Answer:

(A) +6,307.69

(B)

equipment 243,000

less accumulated depreciation 18,692.31

equipment (net) 224,307.69

Explanation:

As it is operating we do not solve for right of use nor lease receivables.

(A)

lease payment 25,000

depreciation expense on the equipment:

243,000 divided among 13 years of useful life = 18,692.31

net effect: 6,307.69

(B)

Again, as this is an operating lease we do not recognize lease receivables and we do not solve usign interest rate we depreciate the asset over time and nothing else.

equipment 243,000

less accumulated depreciation 18,692.31

equipment (net) 224,307.69

The effects of the lease on Crescent's (lessor's) earnings for the first year will be an increase in the value of the equipment by  6,307.69.

The balances in the balance sheet accounts related to the lease at the end of the first year for Crescent will be $ 224,307.69.

Cost is the sum of money used to produce a specific good, according to one definition.

(A)

As a result, the impact on annual earnings will be calculated as follows: Revenue - Depreciation expense

243,000 divided among 13 years of useful life

= Cost / Useful life of the equipment

= 18,692.31

net effect of the product 6,307.69

(B)

This is an operational lease, we do not account for lease receivable, and we also not address the problem using an interest rate; instead, we simply depreciate the property over time.

equipment = 243,000

less accumulated depreciation = 18,692.31

The equipment balance will be = Cost - 1 year depreciation expense

equipment (net) = $ 224,307.69

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Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,100 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 6,400 65% Conversion costs $ 7,500 45% A total of 7,900 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 126,200 Conversion costs $ 207,700 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The cost per equivalent unit for conversion costs for the first department for the month is closest to: Multiple Choice $24.83 $29.76 $26.96 $28.92

Impact of Increased Sales on Operating Income Using the Degree of Operating Leverage Chillmax Company had planned to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 3,500 units sold is $58,500. The degree of operating leverage is 2.3. Now Chillmax expects to increase sales by 10% next year.
Required:
1. Calculate the percent change in operating income expected.
_______%
2. Calculate the operating income expected next year using the percent change in operating income calculated in Requirement 1.

Cereal entrepreneurs focus only on agricultural investments.
O True
O False

Your coin collection contains 53 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2059, assuming they appreciate at an annual rate of 6 percent?

There are 713 identical plastic chips numbered 1 through 713 in a box.

What is the probability of reaching into the box and randomly drawing the chip numbered 564? Express your answer as a simplified fraction or a decimal rounded to four decimal places.

Recently, a Domino's pizza franchise in Upstate New York made the strategic decision to stay open for 24 hours a day. The manager made this decision in response to increased demand for Domino's pizza. Other Domino's franchise owners are now considering adopting a similar strategy. In this activity, you will categorize a set of statements regarding activities in the internal and external environments as they relate to Domino's pizza, and the potential initiative of staying open 24 hours a day. These statements will identify Strengths, Weaknesses, Opportunities, or Threats.

These questions are part of SWOT analysis, which analyzes the organization's strengths and weaknesses, and the opportunities and threats it faces. This tool is a critical planning tool that allows firms to assess both the internal environment in regards to its Strengths and Weaknesses and the external environment in regards to its Opportunities and Threats. This planning analysis can be a foundation to carry the organization through later management functions such as organizing, leading, and controlling operations.

Based on these descriptions, decide if the statement is reflective Of a Strength, Weakness, Opportunity, or Threat. Drop the statement in the correct position.

a. Staffing
b. Health
c. Strong Brand Name
d. Demand
e. Inventory Management
f. Competitors
g. Excellent Location
h. Late Night Eating

Crystal Corporation makes $2,300 payments every month for leasing office equipment. Crystal recorded a lease payment as follows: Lease payable 1,380 Interest expense 920 Cash 2,300 Amortization expense 1,380 Right-of-use asset 1,380 Crystal must have a(n):

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Larned Corporation recorded the following transactions for the just completed month. $78,000 in raw materials were purchased on account. $76,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $111,000 were paid in cash. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor. Depreciation of $198,000 was incurred on factory equipment.

Required:
Record the above transactions in journal entries.

Two independent companies, Sheridan Co. and Pharoah Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained:

Sheridan's Land Pharoah's Land
Cost and book value $581400 $356400
Fair value based upon appraisal 810000 650700

The exchange was made, and based on the difference in appraised fair values, Pharoah paid $159300 to Sheridan. The exchange lacked commercial substance. For financial reporting purposes, Sheridan should recognize a pre-tax gain on this exchange of:

a. $159300.
b. $228600.
c. $0.
d. $44958.

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The following cost data relate to the manufacturing activities of Chang Company during the just completed year:_________.
Manufacturing overhead costs incurred:
Indirect materials $ 15,400
Indirect labor 134,000
Property taxes, factory 8,400
Utilities, factory 74,000
Depreciation, factory 191,200
Insurance, factory 10,400
Total actual manufacturing overhead costs incurred $ 433,400
Other costs incurred:
Purchases of raw materials (both direct and indirect) $ 404,000
Direct labor cost $ 64,000
Inventories:
Raw materials, beginning $ 20,400
Raw materials, ending $ 30,400
Work in process, beginning $ 40,400
Work in process, ending $ 70,400
The company uses a predetermined overhead rate of $22 per machine-hour to apply overhead cost to jobs. A total of 20,100 machine-hours were used during the year.
Required:1. Compute the amount of underapplied or overapplied overhead cost for the year.2. Prepare a schedule of cost of goods manufactured for the year.

Profit is the dollar amount a firm collects from its customers after selling its goods or services. True False

A manufacturer has identified the options for acquiring a machined part. It can make the part on a standard lathe for $250 per unit (including materials). It can make the part on a numerically controlled lathe for $150 per unit (including materials). It can make the part on a machining center for $50 per unit (also including materials). The manufacturer can acquire a standard lathe for $10,000. It could acquire a numerically controlled lathe for $100,000. A machining center would cost $350,000. It has also found that it can purchase the part for $350 per unit. If the demand is 750 units, which method should be used

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The town of Millbridge has just agreed to pay a pension for the town clerk. The pension will be $40,000 per year for the next 20 years. Dwight Ives, the town manager, has decided that the town should put aside enough money today to pay for the entire pension. He has argued that the town will not receive the clerk's services in the future, so future taxpayers should not have to pay the pension. How much must be put aside, assuming the town earns 6 percent compounded annually

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The local Target store sells a variety of Dyson vacuum cleaners. A particularly popular model is the DC22, which costs Target $275 per unit. The annual holding cost per vacuum is 10% of this cost. Demand for the DC22 is relatively constant, but experiences some fluctuations from day to day. Average daily demand for the DC22 is normally distributed with an average of 5 units and a standard deviation of 2 units (and Target is open 365 days a year). When Target places an order of DC22s from its warehouse, the order arrives 3 days later. The fixed ordering cost is $10, regardless of how many DC22s are ordered. Target is willing to tolerate a 1% chance of stockout on any one order cycle. Target would like to use a continuous review inventory model. What is the reorder point (including safety stock)

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In the context of the images involved in managing change, which of the following images have a common assumption that change managers receive change instead of initiating change? (Check all that apply.) Multiple select question. Nurturer Caretaker Interpreter Coach

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Megan Company (not a corporation) was careless about its financial records during its first year of operations, 2017. It is December 31, 2017, the end of the annual accounting period. An outside CPA has examined the records and discovered numerous errors, all of which are described here. Assume that each error is independent of the others.

Required:
Analyze each error and indicate its effect on 2017 and 2018 net income, assets, and liabilities if not corrected. Do not assume any other errors. Use these codes to indicate the effect of each dollar amount: O = overstated, U = understated, and NE = no effect. The first transaction is used as an example.

1. Depreciation expense for 2013, not recorded in 2013, $950.
2. Wages earned by employees during 2013 not recorded or paid in 2013 but recorded and paid in 2014, $500.
3. Revenue earned during 2013 but not or recorded until 2014, $600.
4. Amount paid in 2013 and recorded as expense in 2013 but not an expense until 2014, $200.
5. Revenue collected in 2013 and recorded as revenue in 2013 but not earned until 2014,$900.
6. Sale of services and cash collected in 2013. Recorded as a &bit to Cash and as a credit
to Accounts Receivable, $300.
7. On December 31, land on credit for not recorded until payment was made on February l, 2014.

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Consider two neighboring island countries called Euphoria and Bellissima. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor.

Rye Jeans
Country (Bushels per hour of labor) (Pairs per hour of labor)
Euphoria 4 16
Bellissima 6 12

Initially, suppose Bellissima uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce rye, while Euphoria uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce rye. Consequently, Euphoria produces 15 million pairs of jeans and 20 million bushels of rye, and Bellissima produces 8 million pairs of jeans and 48 million bushels of rye. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye it produces.

Bellissima's opportunity cost of producing 1 pair of jeans is_________ of rye, and Euphoria's opportunity cost of producing 1 pair of jeans is _____________ of rye. Therefore, ___________ has a comparative advantage in the production of jeans, and __________ has a comparative advantage in the production of rye.

Suppose that each country completely specializes in the production of the good in which is has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce _________ million pairs per month, and the country that produces rye will produce _________-- million bushels per month.

Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000.(a) What entry should be made at the time of the issuance of the bonds and warrants? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)(b) Prepare the entry if the warrants were nondetachable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)