Business, 23.05.2020 14:58, patricklcc07777
On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is 20
years. The implicit interest rate in the lease is 10 per cent. The fair value of the cargo ship at the
commencement of the lease is $2,215,560. The lease is non-cancellable, and requires a lease payment
of $300,000 on inception of the lease (on 1 July 2019) and lease payments of $250,000 on 30 June
each year (starting 30 June 2020). Included within the $250,000 lease payments is an amount of
$25,000 representing payment to the lessor for the insurance and maintenance of the cargo ship.
There is no residual payment required. Annuity factor, n=20; r = 10% is 8.5136.
Required:
a) Prove that the interest rate implicit in the lease is 10 per cent. (2 marks)
b) Provide the entries for the lease in the books of Fisher Ltd as at 1 July 2019, and 30 June 2020. (4
marks)
c) Provide the entries for the lease in the books of XFinance Ltd as at 1 July 2019, and 30 June 2020
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 02:30, bellamore
Consider the local telephone company, a natural monopoly. the following graph shows the monthly demand curve for phone services and the company’s marginal revenue (mr), marginal cost (mc), and average total cost (atc) curves. 0 2 4 6 8 10 12 14 16 18 20 100 90 80 70 60 50 40 30 20 10 0 price (dollars per subscription) quantity (thousands of subscriptions) d mr mc atc 8, 60 suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. complete the first row of the following table. pricing mechanism short run long-run decision quantity price profit (subscriptions) (dollars per subscription) profit maximization marginal-cost pricing average-cost pricing suppose that the government forces the monopolist to set the price equal to marginal cost. complete the second row of the previous table. suppose that the government forces the monopolist to set the price equal to average total cost. complete the third row of the previous table. under average-cost pricing, the government will raise the price of output whenever a firm’s costs increase, and lower the price whenever a firm’s costs decrease. over time, under the average-cost pricing policy, what will the local telephone company most likely do
Answers: 2
Business, 22.06.2019 20:40, homework1911
Cherokee inc. is a merchandiser that provided the following information: amount number of units sold 20,000 selling price per unit $ 30 variable selling expense per unit $ 4 variable administrative expense per unit $ 2 total fixed selling expense $ 40,000 total fixed administrative expense $ 30,000 beginning merchandise inventory $ 24,000 ending merchandise inventory $ 44,000 merchandise purchases $ 180,000 required: 1. prepare a traditional income statement. 2. prepare a contribution format income statement.
Answers: 2
Do you know the correct answer?
On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is...
Questions in other subjects:
Mathematics, 23.11.2020 23:40
Social Studies, 23.11.2020 23:40
Mathematics, 23.11.2020 23:40
Mathematics, 23.11.2020 23:40
Mathematics, 23.11.2020 23:40
English, 23.11.2020 23:40
