On January 1, Espinoza Moving and Storage leased a truck for a four-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $10,000 due on December 31 of each year, calculated by the lessor using a 5% discount rate. If Espinoza’s revenues exceed a specified amount during the lease term, Espinoza will pay an additional $4,000 lease payment at the end of the lease. Espinoza estimates a 60% probability of meeting the target revenue amount. What amount should be added to the right-of-use asset and lease liability under the contingent rent agreement?
In: Accounting
The managers of Courtney Cabinets are considering dropping one of their product lines. The product line typically has the following revenue and costs: Sales $120,000 Variable costs 90,000 Contribution margin 30,000 Fixed costs 35,000 Operating loss $ (5,000) If the product line is discontinued, $4,000 of the fixed costs would be avoided. Also, the freed-up capacity would generate $6,000 of additional contribution margin from the expansion of other product lines. If Courtney discontinues the product line, the effect on overall income will be A. $20,000 decrease B. $9,000 increase C. $10,000 decrease D. $12,000 decrease
In: Accounting
2. After seeing your analysis of his decline in profit, Cal decides to lower the price of gas to $2.179 per gallon. After this change, the volume sold increased to 4,400 gallons per day. He asks you to measure his business gains or losses at $2.179. Fixed costs are $250 per day. What is the price elasticity of demand? Can the elasticity be characterized as elastic, inelastic, or neither? By how much did revenues increase or decrease as a result of the change in price? By how much did profits increase or decline? (Profits are revenue minus all costs.)
In: Finance
The marketing strategy of corporate naming rights for sports venues is a fairly recent strategy in the sports business landscape. Imagine you are on the marketing team for a minor league team that will be moving to your city. You have been tasked with generating revenue for the team through the sale of stadium naming rights. Based upon what you learned from the Topic Materials, compose a one-paragraph pitch to persuade a local company that naming rights are worth the hefty price tag. Post your pitch to the Main Forum. Provide your peers with constructive feedback about ways to improve their pitch.
In: Operations Management
1. What is the accounting equation?
2. Who are the internal users of a company’s financial information? What kind of
decisions do they need to make using financial information?
3. What are the four major financial statements of a corporation?
4. GAAP principles and concepts
5. What are the requirements of the Sarbanes-Oxley Act?
6. What is IASB?
7. What are assets? What are prepaid expenses? Examples?
8. What is a liability? What is an unearned revenue? Examples?
9. What are the three basic elements of the balance sheet?
10. Which financial statement reveals the results of a company’s operations?
In: Accounting
Mr. and Mrs. Williams own 100% of Lessing, Inc., a regular corporation (i.e. not an S-Corporation). Mr. and Mrs. Williams work at the company and the corporation pays each of them a reasonable salary for their efforts.
Last year, they employed their 19-year old son to work for the corporation, paying him a salary of $75,000. During a recent IRS audit, the IRS revenue agent determined that the son rarely shows up for work and spends most of his time playing golf.
Ignoring payroll tax implications, what are the most likely potential tax implications of this discovery to Mr. and Mrs. Williams.
In: Accounting
| a. | Performed $23,600 of services on account. |
| b. | Collected $21,200 cash on accounts receivable. |
| c. | Paid $4,600 cash in advance for an insurance policy. |
| d. | Paid $1,420 on accounts payable. |
| e. | Recorded the adjusting entry to recognize $3,700 of insurance expense. |
| f. | Recorded the adjusting entry to recognize $340 accrued interest revenue. |
| g. | Received $5,300 cash for services to be performed at a later date. |
| h. | Purchased land for $1,870 cash. |
| i. |
Purchased supplies for $1,300 cash |
| Required |
|
Record each of the above transactions in general journal form and then show the effect of the transaction in a horizontal statements model. |
In: Accounting
economics question
be clear show steps and solution for rating solve in 40 minutes for rating
Seven years ago a New Brunswick logging company purchased a used wood chipper for $131,000 for biomass and custom chipping. Operating and maintenance costs averaged $4,000 per year. A complete overhaul at the end of year 4 cost additional $9,000. Annual revenue from using the chipper was $20,000 per year. Calculate the annual worth of the chipper at 7% interest rate
(Note: Round your answer to 2 decimal places and do not use the $ sign in your answer)
In: Economics
CCS is a construction company that builds roads in the Northwest Territories (NWT). CCS uses the percentage-of-completion method and measures completion on the basis of kilometres completed. In November 20X9, CCS signed an agreement with the NWT government to build 50 kilometres of new road for a total cost of $40 million. The contract would likely take three years to complete and would start in the spring of 20X10. Over the next three years, 15 kilometres were completed in 20X10, 22 kilometres completed in 20X11, and 13 kilometres completed in 20X12.
Required:
Calculate the amount of revenue that would be recognized in 20X10, 20X11, and 20X12.
In: Accounting
3. Bart is a fisherman in Rend Lake Illinois and has a job paying $100/day. He has to decide whether to work at the store or fish in the lake and sell the fish. Demand for fish is Qd = 1000 – 2P per day where, P is price per kilo and Qd is quantity demanded. a) Assume the Rend Lake is a public property and find the optimum fish catch for Bart. b) Find the price and the total revenue Bart will make each day. c) Suppose Bart owned Rend Lake. Find the optimum catch per day and show that in this situation fish will last longer.
In: Economics