On January 1, 2021, Miller Company leased equipment from Alpha Manufacturer under a three-year lease agreement....

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On January 1, 2021, Miller Company leased equipment from Alpha Manufacturer under a three-year lease agreement. The lease agreement specified annual payments of $50,000 beginning January 1, 2021, the beginning of the lease, and on each December 31 thereafter through 2022. On December 31, 2023, the equipment was reverted back to Alpha The equipment was manufactured by Alpha at a cost of $119,163 and was expected to have a useful life of three years with no salvage value at the end of its life. The fair value of equipment is at $139,163 Alpha seeks an 8% return on its lease contract, which is known by Miller. Present value of ordinary Present value annuity of $1 at of annuity due of $1 at 8% 8% Present value of $1 at 8% 0.79383 0.68058 2.78326 2.57710 3.99271 4.31213 (Do not add dollar sign; do not add comma by yourself to your amount, round the answer to the whole number; use minus sign if the amount is negative) Answer the following questions 1. Assume the lease is classified as a finance lease/sales-type lease a. What is the amount related to the lease that Miller will report in its income statement for the year ended December 31, 2021? (Ignote income taxes) b. What is the balance of lease liability that Miller will report in its balance sheet at December 31, 2021? c. What is the balance of right-of-use asset that Miller will report in its balance sheet at December 31, 20217 d. What is the amount related to the bonds that Miller will report in its statement of cash flows for the year ended December 31, 2021? Indicate the category in which to classify cash flows (amount), activities at activities (amount) Period e Assume Alpha incurred $1,133 of legal fees for the lease execution. What is the amount related to the lease that Alpha will report in its income statement for the year ended December 31, 20217 2. Assume the useful life is 5 years, the fair value of equipment is $250,000 and the lease is classified as an operating lease. What is the balance of right-of-use asset that Miller will report in its balance sheet at December 31, 2021? On January 1, 2021, Miller Company leased equipment from Alpha Manufacturer under a three-year lease agreement. The lease agreement specified annual payments of $50,000 beginning January 1, 2021, the beginning of the lease, and on each December 31 thereafter through 2022. On December 31, 2023, the equipment was reverted back to Alpha The equipment was manufactured by Alpha at a cost of $119,163 and was expected to have a useful life of three years with no salvage value at the end of its life. The fair value of equipment is at $139,163 Alpha seeks an 8% return on its lease contract, which is known by Miller. Present value of ordinary Present value annuity of $1 at of annuity due of $1 at 8% 8% Present value of $1 at 8% 0.79383 0.68058 2.78326 2.57710 3.99271 4.31213 (Do not add dollar sign; do not add comma by yourself to your amount, round the answer to the whole number; use minus sign if the amount is negative) Answer the following questions 1. Assume the lease is classified as a finance lease/sales-type lease a. What is the amount related to the lease that Miller will report in its income statement for the year ended December 31, 2021? (Ignote income taxes) b. What is the balance of lease liability that Miller will report in its balance sheet at December 31, 2021? c. What is the balance of right-of-use asset that Miller will report in its balance sheet at December 31, 20217 d. What is the amount related to the bonds that Miller will report in its statement of cash flows for the year ended December 31, 2021? Indicate the category in which to classify cash flows (amount), activities at activities (amount) Period e Assume Alpha incurred $1,133 of legal fees for the lease execution. What is the amount related to the lease that Alpha will report in its income statement for the year ended December 31, 20217 2. Assume the useful life is 5 years, the fair value of equipment is $250,000 and the lease is classified as an operating lease. What is the balance of right-of-use asset that Miller will report in its balance sheet at December 31, 2021?

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