Business, 31.12.2020 19:30 MiaZo5869

The lease payments from footnote disclosures of an operating lease Year Lease payments ($)
1. 1,375
2. 1,210
3. 825
Year 4 and after 4,125

Assume a discount rate of 8%.

Required:
a. Calculate the PV of all the lease payments.
b. Assume a 10% discount rate and a tax rate of 25%, so that the PV of all the lease payments is $5,220. Complete the I/S figures .

Answers: 2

Show answers

Answers

Answer from: guitarherolds

Complete Question

The lease payments from footnote disclosures of an operating lease Year Lease payments ($) 1. 2. 3. Year 4 and after 1,375 1,210 825 4,125 Assume a discount rate of 8%.

Required:

a. Calculate the Pv of all the lease payments.

b. Assume a 10% discount rate and a tax rate of 25%, so that the Pv of all the lease payments is $5,220.

Complete the I/S figures Income Statement Effects

As Reported Adjustment Adjusted

NO PAT $1,500 - -

INT(1-tax rate) 475 - -

NI $1,025 - -

Explanation:

from the question

present value of all lease payment

year lease payment

1 $1373

2 $1210

3 $ 825

4 and after $4125

To get or derive the of the lease payment after year 4 i.e future lease payment

= $\frac{ annual\ lease\ payment\ for\ year\ 4\ and\ after}{ discount\ rate}$

= $\frac{4125 }{ 0.08} = 51562.5$

$PV = (1+i)^{-n}$

present value of all lease payment

year lease payment present value at 8%

1 $1375 $1273

2 $1210 $1037

3 $835 $654

4 $4125 $3032

$51562.5 $37899

Total $43895

calculation for PV

year

1 0.9259 × 1375

2 0.8573 × 1210

3 0.7938 × 835

4 0.7350 × 4125

after 0.7350 × 51562.5

As reported adjustment Adjusted

NO PAT $1500 $0 $ 1500

INT ( 1-Tax rate) $ 475 $392 $ 867

NI $1025 $0 $ 634

Calculation of adjustment and adjusted

adjustment adjusted

NO PAT $1500 + $0

INT (1-TAX RATE] 5220×0.10×(1 -0.25) $475 + $392

NI $1500 - $867

Answer from: Quest

yeah its a ok ! just ask the qestoin and someone well answer !

Answer from: Quest

D. want to invest in mexico and cause the exchange rate to fall. * i just did the quiz & got the answer right! (edgenuity) *

Other questions on the subject: Business

Business, 22.06.2019 11:30, brucewayne390

Schonhardt corporation's relevant range of activity is 2,500 units to 5,500 units. when it produces and sells 4,000 units, its average costs per unit are as follows: averagecost per unitdirect materials $ 7.60direct labor $ 2.90variable manufacturing overhead $ 1.65fixed manufacturing overhead $ 2.90fixed selling expense $ 0.95fixed administrative expense $ 0.65sales commissions $ 0.75variable administrative expense $ 0.65if 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to: multiple choicea $16,800b $11,400c $11,600d $15,400

Answers: 3

continue

Business, 22.06.2019 11:50, CheddaDsk

What is marketing’s contribution to the new product development team? a. technical expertise needed to translate designs into an actual product/service. b. deep customer insight that leads to product ideas. c. ability to assess financial viability d. feedback on design as well as how customers will actually use the product e. technical expertise needed to translate concepts into product/service designs.

Answers: 2

continue

Business, 22.06.2019 19:50, leannamat2106

At the beginning of 2014, winston corporation issued 10% bonds with a face value of $2,000,000. these bonds mature in five years, and interest is paid semiannually on june 30 and december 31. the bonds were sold for $1,852,800 to yield 12%. winston uses a calendar-year reporting period. using the effective-interest method of amortization, what amount of interest expense should be reported for 2014? (round your answer to the nearest dollar.)

Answers: 2

continue

Business, 22.06.2019 21:00, shawntawright1

On july 2, year 4, wynn, inc., purchased as a short-term investment a $1 million face-value kean co. 8% bond for $910,000 plus accrued interest to yield 10%. the bonds mature on january 1, year 11, and pay interest annually on january 1. on december 31, year 4, the bonds had a fair value of $945,000. on february 13, year 5, wynn sold the bonds for $920,000. in its december 31, year 4, balance sheet, what amount should wynn report for the bond if it is classified as an available-for-sale security?

Answers: 3

continue

You know the right answer?

The lease payments from footnote disclosures of an operating lease Year Lease payments ($)
1...