Question
In: Accounting
15-28 Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement...
15-28
Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls for Werner to make quarterly lease payments of $349,133, payable each September 30, December 31, March 31, and June 30, with the first payment at September 30, 2021. Werner's incremental borrowing rate is 8%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Determine the present value of the lease
payments at September 30, 2021.
2. What pretax amounts related to the lease would
Werner report in its balance sheet at December 31, 2021?
3. What pretax amounts related to the lease would
Werner report in its income statement for the year ended December
31, 2021?
4. What pretax amounts related to the lease would
Werner report in its statement of cash flows for the year ended
December 31, 2021?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Werner Chemical, Inc., leased a protein analyzer on September 30, 2021. The five-year lease agreement calls...
Werner Chemical, Inc., leased a protein analyzer on September
30, 2021. The five-year lease agreement calls for Werner to make
quarterly lease payments of $349,133, payable each September 30,
December 31, March 31, and June 30, with the first payment at
September 30, 2021. Werner's incremental borrowing rate is 8%.
Amortization is recorded on a straight-line basis at the end of
each fiscal year. The useful life of the equipment is five years.
(FV of $1, PV of $1, FVA...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls...
Werner Chemical, Inc., leased a protein analyzer on September
30, 2018. The five-year lease agreement calls for Werner to make
quarterly lease payments of $417,651, payable each September 30,
December 31, March 31, June 30, with the first payment at September
30, 2018. Werner's incremental borrowing rate is 12%. Amortization
is recorded on a straightline basis at the end of each fiscal year.
The useful life of the equipment is five years. (FV of $1, PV of
$1, FVA of...
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Abbott Equipment leased a protein analyzer to Werner Chemical,
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agreement calls for Werner to make quarterly lease payments of
$365,741, payable each September 30, December 31, March 31, and
June 30, with the first payment at September 30, 2021. Abbott's
implicit interest rate is 8%. The useful life of the equipment is
five years. (FV of $1, PV of...
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2021. Abbott purchased...
Abbott Equipment leased a protein analyzer to Werner Chemical,
Inc., on September 30, 2021. Abbott purchased the machine from
NutraLabs, Inc., at a cost of $6.1 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$365,741, payable each September 30, December 31, March 31, and
June 30, with the first payment at September 30, 2021. Abbott's
implicit interest rate is 8%. The useful life of the equipment is
five years. (FV of $1, PV of...
NutraLabs, Inc., leased a protein analyzer to Werner Chemical, Inc., on September 30, 2018. NutraLabs manufactured...
NutraLabs, Inc., leased a protein analyzer to Werner Chemical,
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a cost of $4.75 million. The five-year lease agreement calls for
Werner to make quarterly lease payments of $401,337, payable each
September 30, December 31, March 31, June 30, with the first
payment at September 30, 2018. NutraLabs’ implicit interest rate is
12%.
1. Determine the price at which NutraLabs is
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NutraLabs, Inc., leased a protein analyzer to Werner Chemical, Inc., on September 30, 2018. NutraLabs manufactured...
NutraLabs, Inc., leased a protein analyzer to Werner Chemical,
Inc., on September 30, 2018. NutraLabs manufactured the machine at
a cost of $5 million. The five-year lease agreement calls for
Werner to make quarterly lease payments of $391,548, payable each
September 30, December 31, March 31, June 30, with the first
payment at September 30, 2018. NutraLabs’ implicit interest rate is
12%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD
of...
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc. on September 30, 2018. Abbott purchased...
Abbott Equipment leased a protein analyzer to Werner Chemical,
Inc. on September 30, 2018. Abbott purchased the machine from
NutraLabs, Inc., at a cost of $6.35 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$414,389, payable each September 30, December 31, March 31, June
30, with the first payment at September 30, 2018. Abbot's implicit
interest rate is 16%. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1...
Abbott Equipment leased a protein analyzer to Werner Chemical Inc. on September 30,2018. Abbott purchased the...
Abbott Equipment leased a protein analyzer to Werner Chemical
Inc. on September 30,2018. Abbott purchased the machine from
NutraLabs,inc. at a cost of $6.5 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$424,177 payable each September 30, December 31, March 31, June 30,
with the first payment at September 30h,2018. Abbott's implicit
interest rate is 16%.
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its balance sheet at December 31,2018 and...
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