P21-3 and P22-3 - 3,000,000 Inventory 2,600,000 (d) page 11...

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P21-3 (a) Winston = Lessee Ewing = Lessor For Lessee, this example qualifies as a capital lease due to: life of the asset and lease term are equal, present value of lease payments is greater than 90% of asset value and the title transfers to Lessee. For Lessor, this example qualifies as sales-type lease because a manufacturers’ profit is included and is known, e.g. $2,600,000 cost and $400,000 profit. The present value of lease payments is the same for both at $3M. (b) page 1125 Lease equipment under capital lease 3,000,000 Lease liability 3,000,000 (c) page 1143 Cost of goods sold 2,600,000 Lease receivable 3,000,000 Sales revenue
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Unformatted text preview: 3,000,000 Inventory 2,600,000 (d) page 11 & 1143 Lessee: Lease liability 413,971 Cash 413,971 Lessor: Cash 413,971 Lease liability 413,971 (e) Date Annual Payment 8% Interest Reduction Lease liability 1/11/11 3,000,000 1/11/11 413,971 413,971 2,586,029 1/11/11 413,971 206,882 207,089 2,378,940 1/11/11 413,971 190,315 223,656 2,155,284 P22-3 (1) Retained earnings 3500 Sales commission 2500 Sales expense 1000 (2) COGS 25,700 Retained earnings 19,000 Inventory 6,700 (3) Accumulated depreciation 4800 Depreciation expense 4800 (4) Construction process 45,000 Deferred tax 18,000 Retained earnings 27,000...
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P21-3 and P22-3 - 3,000,000 Inventory 2,600,000 (d) page 11...

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