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Bess [88]
2 years ago
12

Star Company has entered into a 3-year lease agreement with Bell Corp. (lessor) for the use of 10 new commercial copy machines.

The present value (PV) of the sum of the lease payments is $72,000. The total fair value of the machines on the lease commencement date is $120,000. An option to purchase the machines is not part of the lease agreement, and the copy machines will be returned to Bell at the end of the lease period. The machines are not specialized, and Bell will be able to lease or sell the leased machines after they are returned. The estimated useful life is 7 years. The residual value of $6,500 per machine is not guaranteed by Star or by a third party. It is probable that all lease payments will be collected. How should the lease be classified by the lessor?
Business
1 answer:
Lera25 [3.4K]2 years ago
8 0

Answer:

Operating lease

Explanation:

An operating lease is basically a lease contract that allows the lessee to use the assets but it doesn't transfer any ownership rights. It is like renting a house, you can use it as long as pay the rent, but the house isn't yours. Operating leases are not included in the balance sheet, while financial leases are.

In this case, Star Company may use the copy machines but it must return them in three years.

You might be interested in
Tickets Now contracts with the producer of Riverdance to sell tickets online. Tickets Now charges each customer a fee of $4 per
Lemur [1.5K]

Answer:

The correct option: $14 because both the fee from the customer and the producer are earned

Explanation:

Based on the information given we were told that Tickets Now charges each of their customer a fee amount of $4 per ticket in which they receives the amount of $10 per ticket from the producer which means that the amount of revenue Tickets should Now recognize for each Riverdance ticket they sold will be $14 ($10 per ticket +$4 per ticket) because both the fee from the customer and the producer are earned.

7 0
1 year ago
Jupiter Satellite Corporation earned $29 million for the fiscal year ending yesterday. The firm also paid out 30 percent of its
Arturiano [62]

Answer:

11.13%

Explanation:

Calculation to determine the required rate of return on the stock

Using this formula

Required rate of return=Last EPS*Payout*(1+RoE*(1-payout rate))/Current Price+RoE*(1-payout rate)

Let plug in the formula

Required rate of return=29/2.6*30%*(1+11%*(1-30%))/105+11%*(1-30%)

Required rate of return=11.13%

Therefore the required rate of return on the stock will be 11.13%

7 0
1 year ago
4. College logo T-shirts priced at $15 sell at a rate of 25 per week, but when the bookstore marks them down to $10, it finds th
Lana71 [14]

Answer: PED = -1.665

The price demand elasticity is relatively elastic because PED is greater than 1..(ignore the minus sign)

Explanation:

Using the formula PED = % change in quantity/ % change in price

PED = ((Q1 - Q0)/(Q1 + Q0))/((P1 -P0)/(P1+P0))...EQU 1 where Q1 = 50 is quantity of product at Price P1 =10 and Q0 = 25 is quantity of product at Price P0 = 15 and PED is price of elasticity

Substituting figures into equ1

PED = ((50 - 25)/(50+25)) /((10 -15)/(10+15))

PED = -1.665

7 0
2 years ago
Although you were not fortunate enough to get Tee Time Golf Resort stock as an IPO, you are still thinking about trying to add s
elena-14-01-66 [18.8K]

Answer:

Secondary market; Prospectus

Explanation:

The broker is talking about the secondary market. After initial public offering, shares are traded again privately, in the secondary market. Likewise, the broker wants to send a brochure or a prospectus to the client in order to help him understand about the company to finalize the decision. A prospectus consists of the company’s complete information.

4 0
2 years ago
Which are examples of copyrighted online materials? Check all that apply. an article from an Internet magazine lyrics for a song
agasfer [191]

Answer:

The correct options are;

Photos taken by a student in his blog

An illustration sold by an artist on her website

An excerpt from a novel published in 1913

Explanation:

With the copyright law the holder of a copyrighted material has the exclusive authority to grant permission to others to create from, copy, distribute, or display in public, the copyrighted material.

A copyright is said to have expired and to be in public domain (with automatic permission to use) when it has been up to 120 years since it was created. Government created material are not covered by the copyright law and can be used

Copyright material can only be used without the express permission of the copyright owner when it is covered by the TEACH Act of the usage must be taken as "fair use"

Therefore,

1) photos taken by a student in his blog

2) An illustration sold by an artist on her website

3) An excerpt from a novel published in 1913  are copyrighted online materials.

7 0
2 years ago
Read 2 more answers
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