Multiple choice 4

# Multiple choice 4 - 1 On December 1 2013 Goetz Corporation...

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1. On December 1, 2013, Goetz Corporation leased office space for 10 years at a monthly rental of \$90,000. On that date Perez paid the landlord the following amounts: Rent deposit \$ 90,000 First month's rent 90,000 Last month's rent 90,000 Installation of new walls and offices 660,000 \$930,000 The entire amount of \$930,000 was charged to rent expense in 2013. What amount should Goetz have charged to expense for the year ended December 31, 2013? a. \$90,000 b. \$95,500 c. \$185,500 d. \$660,000 e. None of these . b \$90,000 + \$660,000 1 10 12 = \$95,500. 2. Haystack, Inc. manufactures machinery used in the mining industry. On January 2, 2013
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Unformatted text preview: it leased equipment with a cost of \$400,000 to Silver Point Co. The 5-year lease calls for a 10% down payment and equal annual payments at the end of each year. The equipment has an expected useful life of 5 years. If the selling price of the equipment is \$650,000, and the rate implicit in the lease is 8%, what are the equal annual payments? PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 5 periods 4.31213 3.99271 .68508 10%, 5 periods 4.16986 3.79079 .62092 a. \$146,517 b. \$135,662 c. \$151,644 d. \$162,796 e. None of these...
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• Fall '13
• Leasing, Leasehold estate, Rental agreement, equal annual payments, PV Single

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