Question
In: Accounting
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 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 1 year agoRelated Solutions
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...
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,...
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...
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,
Inc., on September 30, 2018. NutraLabs manufactured the machine at
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
“selling” the equipment (present value of the lease payments) at...
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%.
What pretax amounts related to the lease would Abbott report in
its balance sheet at December 31,2018 and...
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from Builders, Inc. The lease agreement calls...
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse
equipment from Builders, Inc. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $545,210 over
a 4-year lease term (also the asset’s useful life), payable each
June 30 and December 31, with the first payment at June 30, 2021.
Georgia-Atlantic's incremental borrowing rate is 10.0%, the same
rate Builders used to calculate lease payment amounts. Builders
manufactured the equipment at a cost of $3.2 million. (FV of $1, PV...
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse equipment from Builders, Inc. The lease agreement calls...
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse
equipment from Builders, Inc. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $478,767 over
a 4-year lease term, payable each June 30 and December 31, with the
first payment at June 30, 2018. Georgia-Atlantic's incremental
borrowing rate is 9.0%, the same rate Builders used to calculate
lease payment amounts. Builders manufactured the equipment at a
cost of $2.8 million. (FV of $1, PV of $1, FVA of $1,...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- . Use the following information to calculate your company's expected return State Probability Return Boom 20%...
- You are considering the following two projects and can only take one. Your cost of capital...
- C++: Write a program that produces truth tables for the following compound propositions. Write the header...
- 1. What is the historical role of investment bankers ? Has this role changed ? Why...
- How were the original Internet requirements met through its design? What are the two main requirements...
- discuss crowdfunding on platforms: What features of the services incorporate virality? What are some of the...
- A textbook of mass 2.08 kg rests on a frictionless, horizontal surface. A cord attached to...
ADVERTISEMENT