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 $509,761 over a 5-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 8.0%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $3.8 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
1. Determine the price at which Builders is “selling” the equipment (present value of the lease payments) at June 30, 2018.
2. What amounts related to the lease would Builders report in its balance sheet at December 31, 2018 (ignore taxes)?
3. What amounts related to the lease would Builders report in its income statement for the year ended December 31, 2018 (ignore taxes)?

(For all requirements, enter your answers in whole dollars and not in millions. Round your final answer to nearest whole dollar.)

Lease payments right of us Asset/Lease Payable

Situation 1

Situation 2

Situation 3

Exercise 15-3 Finance lease; lessee; balance sheet and income statement effects [LO15-2] On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $559,946 over a four-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 10%, the same rate IC uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The fair value of the warehouse is $3.8. (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 June 30, 2018 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2018? 3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2018? (For all requirements, enter your answers in whole dollars and not in millions. Round your final answer to nearest whole dollar.)

On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $468,683 over a five-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 10%, the same rate IC uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The fair value of the warehouse is $3.8. (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 June 30, 2018 that Georgia-Atlantic uses to record the right-of-use asset and lease liability.
2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2018?
3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2018?

On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $545,554 over a four-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 8%, the same rate IC uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The fair value of the warehouse is $3.8. (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 June 30, 2018 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2018? 3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2018? (For all requirements, enter your answers in whole dollars and not in millions. Round your final answer to nearest whole dollar.)

(Econometrics) Imagine you have a large dataset containing 12 variables on 5000 individuals over 12 year period. Individuals are interviewed annually and their income, assets, age, race, marriage status, sex, education level, mother's education, father's education, food expenditure, religion, and annual vacation spending are recorded.

A) If you are trying to build a model predicting vacation spending what model would you build?

B) Explain where you would prefer fixed effect vs random effects model.

C) Should you worry about endogeneity? If you do what should you do?

Jake’s cheese Company produces gourmet cheese for resale at local grocery stores. Jake’s expected to use 0.50 direct labor hours to produce one unit (batch) of product, and the variable overhead rate is $5.00 per hour. Actual results are in for last year, which indicates 45,000 batches of cheese were produced and sold. The company's direct labor workforce worked 27,500 hours, and variable overhead costs totaled $144,000. Required: (1) Calculate the variable overhead spending variance. (2) Calculate the variable overhead efficiency variance. (3) Suggest several possible reasons for the variable overhead spending and efficiency variances.

17. Assume that aggregate supply meets aggregate demand in the upward sloping portion of the AS curve. Which of the following examples does NOT correctly link the change in aggregate demand/supply and the effect on prices and output?

• A. A cut in property taxes ⇒ Aggregate demand increases; prices and output rise.
• B. A drop in export demand by foreign purchasers ⇒ Aggregate demand decreases; prices and output fall.
• C. An increase in military spending ⇒ Aggregate demand increases; prices and output rise.
• D. An increase in imports ⇒ Aggregate demand increases; prices and output rise.
• E. A decline in business investment spending ⇒ Aggregate demand decreases; prices and output fall.

The patient recovery time from a particular surgical procedure is normally distributed with a mean of 3 days and a standard deviation of 2 days. Let X be the recovery time for a randomly selected patient. Round all answers to 4 decimal places where possible.

a. What is the distribution of X? X ~ N(,)

b. What is the median recovery time?  days

c. What is the Z-score for a patient that took 4.1 days to recover?

d. What is the probability of spending more than 3.6 days in recovery?

e. What is the probability of spending between 2.3 and 2.9 days in recovery?

f. The 90th percentile for recovery times is  days.