WIN Ltd. has entered into a three year lease arrangement with Tanya sports club in respect...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
WIN Ltd. has entered into a three year lease arrangement with Tanya sports club in respect of Fitness Equipments costing 16,99,999.50. The annual lease payments to be made at the end of each year are structured in such a way that the sum of the Present Values of the lease payments and that of the residual value together equal the cost of the equipments leased out. The unguaranteed residual value of the equipment at the expiry of the lease is estimated to be 1,33,500. The assets would revert to the lessor at the end of the lease. Given that the implicit rate of interest is 10%. You are required to calculate the amount of the annual lease payment and the unearned finance income. Discounting Factor at 10% for years 1, 2 and 3 are 0.909, 0.826 and 0.751 respectively. WIN Ltd. has entered into a three year lease arrangement with Tanya sports club in respect of Fitness Equipments costing 16,99,999.50. The annual lease payments to be made at the end of each year are structured in such a way that the sum of the Present Values of the lease payments and that of the residual value together equal the cost of the equipments leased out. The unguaranteed residual value of the equipment at the expiry of the lease is estimated to be 1,33,500. The assets would revert to the lessor at the end of the lease. Given that the implicit rate of interest is 10%. You are required to calculate the amount of the annual lease payment and the unearned finance income. Discounting Factor at 10% for years 1, 2 and 3 are 0.909, 0.826 and 0.751 respectively.
Expert Answer:
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
Students also viewed these accounting questions
-
A major cattle feeding operation has entered into a firm commitment to buy 100,000 bushels of corn to be delivered to its feed lot in Kansas. The corn is expected to be delivered in 90 days. The...
-
A financial institution has entered into a 10-year currency swap with company Y. Under the terms of the swap, the financial institution receives interest at 3% per annum in Swiss francs and pays...
-
Payments of $1500 will be made at the end of every quarter for 13 1/2 years. Using a nominal rate of 7.5% compounded semiannually, calculate the annuitys: a. Present value. b. Future value.
-
A) Suppose you wanted to make a photoconductor that interacts in the visible, green light range (500-570 nm). Which of the following semiconductors would be your best choice, and why? Si, AIP, InAs,...
-
Christophers Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2013 follow: Raw materials...
-
A job order cost sheet for Ryan Company is shown below. Job No. 92 For 2,000 Units Date Direct Materials Direct Manufacturing Labor Overhead Beg. bal. Jan. 1 7,000 8,000 5,600 8 8,000 12 9,000 7,200...
-
Suppose the probabilities are 0.89,0.09, and 0.02 that the finish on a new car will be rated acceptable, easily repairable, or unacceptable. Find the probability that, among 20 cars painted one...
-
You need to calculate the Average Days on Lot based on MSRP and/or Types using the Inventory data. n. Enter functions into the Average Days on Lot chart area that calculate the following: Insert a...
-
Lulzbot.com sells 6,000 units of its product for $500 each. The sales price includes a one-year warranty on parts. 3% of units are expected to be defective and repair costs are expected to average...
-
Some farmers were interested in predicting inches of growth of corn as a function of rainfall on a monthly basis, so they collected data from the growing season and estimated an equation of the...
-
Jose Zorilla uses a perpetual inventory system. During April, he sold 700 units, (270 units on April 20 and 430 units on April 28). The following other information is available: Units Unit Cost Total...
-
Differentiate between the following pairs of concepts: (a) Probability and non-probability sampling (10 marks) (b) Exploratory research and causal research (10 marks)
-
Here is a process I encourage you all to use. Start withexcel spreadsheet and work through total costcalculations. I am showing cost calculation for one combination. You can do the rest combinations...
-
Apply principles of management needed to work in teams, build cross-functional teams, and facilitate collaborative decision making. You have just been hired as a consultant to a health care...
-
You are the office manager for Dr. Jones. He comes to you with a new Cigna contract that he just received in the mail. He is not sure he will be able to increase the number of employees that he...
-
identify and discuss the primary strategic approach you took in the simulation and your logic for why. b. Did the priorities or tactics change as the simulation went along? If so, how and why? If...
-
FreemanCare Inc, which maintains and runs health maintenance organizations, has a price/book value ratio of 4. It plans to merge with NewcombCare Inc, a corporation that owns and runs hospitals, and...
-
What characteristic determines whether an activity should be accounted for in a special revenue fund or in a permanent fund?
-
The city of Clinton was incorporated on January 1, 2014. On December 31, 2019, a careful study of the citys records revealed the following information regarding long-term debt: a. General obligation...
-
Peninsula Company owns an 80% controlling interest in Sandbar Company. Sandbar regularly sells merchandise to Peninsula, which then sells to outside parties. The gross profit on all such sales is...
-
Has the U.S. economy experienced inflation or deflation during recent recessions? Explain.
-
How do you think recessions influence elections?
-
Inflation is soaring and employment is beginning to show sustained improvement. The unemployment rate is 6 percent, compared to its 3.5 percent rate prepandemic. The CPI grew 5.4 percent in June, and...
Study smarter with the SolutionInn App