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Question 4
1.5 points
On January 1, 2020 Arab Company leases a machine from GMC Corp. with 8 years useful life. The lease term is six-year requires payment of $87,000 at the beginning of each year. The incremental
borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee. If the fair value of the machine is $520,000, and the machine will be reverting to GMC Corp at the end
of lease term.
The present value of an annuity due of 1 for six years at 10% is 4.79079.
The present value of an annuity due of 1 for six years at 8% is 4.99271.
The leased machine will be recorded in the Arab Corp. books as lessee at:
Oo oo
a. $509,256.
b. S488.661.
c. 5434,366.
d. S520,000.​

Maldonia has a comparative advantage in the production of , while lamponia has a comparative advantage in the production of . suppose that maldonia and lamponia specialize in the production of the goods in which each has a comparative advantage. after specialization, the two countries can produce a total of million pounds of lemons and million pounds of coffee.

Depreciation on the company's equipment for 2017 is computed to be $18,000.the prepaid insurance account had a $6,000 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of the company's insurance policies showed that $1,100 of unexpired insurance coverage remains. the office supplies account had a $700 debit balance on december 31, 2016; and $3,480 of office supplies were purchased during the year. the december 31, 2017, physical count showed $300 of supplies available. two-thirds of the work related to $15,000 of cash received in advance was performed this period. the prepaid insurance account had a $6,800 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of insurance policies showed that $5,800 of coverage had expired. wage expenses of $3,200 have been incurred but are not paid as of december 31, 2017.

Perez, inc., applies the equity method for its 25 percent investment in senior, inc. during 2018, perez sold goods with a 40 percent gross profit to senior, which sold all of these goods in 2018. how should perez report the effect of the intra-entity sale on its 2018 income statement?