course hero 18 - be exchanged and the manner and terms of...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Business, Accounting/Business Analysis/Financial Reporting - Other Accounting problems and questions 1. An alternative available when the seller is exposed to continued risks of ownership through return of the product is Recording the sale, and accounting for returns as they occur in future periods. Not recording a sale until all return privileges have expired. Recording the sale, but reducing sales by an estimate of future returns. All of the above. . 2. The percentage-of-completion method must be used when certain conditions exist. Which of the following is NOT one of those necessary conditions? Estimates of progress toward completion, revenues, and costs are reasonably dependable. The contractor can be expected to perform the contractual obligation The buyer can be expected to satisfy some of the obligations under the contract. The contract clearly specifies the enforceable rights of the parties, the consideration to
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: be exchanged, and the manner and terms of settlement. 3. Mayer Company leased equipment from Lennon Company on July 1, 2008, for an eight-year period expiring June 30, 2016. Equal annual payments under the lease are $300,000 and are due on July 1 of each year. The first payment was made on July 1, 2008. The rate of interest contemplated by Mayer and Lennon is 8%. The cash selling price of the equipment is $1,861,875 and the cost of the equipment on Lennon's accounting records was $1,650,000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Lennon, what is the amount of profit on the sale and the interest income that Lennon would record for the year ended December 31, 2008? $0 and $0 $0 and $62,475 $211,875 and $62,475 $211,875 and $74,475...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern