Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2021. Abbott purchased the

Question:

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 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, and June 30, with the first payment at September 30, 2021. Abbott’s implicit interest rate is 12%. The useful life of the equipment is five years.

Required:
1. What pretax amounts related to the lease would Abbott report in its balance sheet at December 31, 2021?
2. What pretax amounts related to the lease would Abbott report in its income statement for the year ended December 31, 2021?
3. What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31, 2021?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

Fantastic news! We've Found the answer you've been seeking!