On January 1, 2014, Draper Inc. signed a five-year non-cancelable lease with Thorn hill Company for custom-made equipment. The lease calls for five payments of $161,364.70 to be made at the beginning of each year. The leased asset has a fair value of $900,000 on January 1, 2014. There is no bargain purchase option, and ownership of the leased asset reverts to Thorn hill at the lease end. The leased asset has an expected useful life of six years, and Draper uses straight-line depreciation for financial reporting purposes. Its incremental borrowing rate is 8%. Draper uses a calendar year for financial reporting purposes.
1. Under U.S. GAAP, would Draper classify this lease as a capital lease or as an operating lease? Explain. 2. Under IFRS, would Draper classify this lease as a capital lease or as an operating lease? Explain.
Hello,Buck and Company incurred the following costs during August:Raw materials purchased$41,400Direct labor ($13.6 per hour)60,384Manufacturing overhead (actual)90,420Se...Sep 08 2020
Consider the phase change material (PCM) of Problems 8.47 and 9.57. The PCM is housed in a long, horizontal, and insulated cylindrical enclosure of diameter De = 200 mm, ...Jul 23 2020
Revise the following sentence fragments, comma splices, and run-on sentences.Comma Spice: Reading your résumé out loud can help you catch typos and small errors, it can a...Jun 10 2021
How are LLCs and LLPs related to the other forms of organization?Here is a tip:The owners of many businesses desire both tax benefits and limited liability.Apr 23 2021
If there is an interest rate of of 18% compounded monthly the nominal rate for 2 years would be18243036May 24 2018
Robert Owen was one of the prominent contributors to preclassical management thought. Which of the following did Robert Owen advocate/propose? (a) Division of labor (b)...Apr 02 2018
Identify the element represented by each of the following symbols and give the number of protons and neutrons in each: (a)(b)(c)(d)Aug 21 2021
Why is the activity-based costing described in this chapter unacceptable for external financial reports?May 22 2020
In the following reaction, 2.00 moles of both hydrogen gas and oxygen gas are added to a 4.00 L empty vacuum-sealed container that is pressurized to force the reaction to...Aug 19 2021
Kent Pham, CPA, is a 45-year-old single taxpayer living at 169 Trendie Street, La Jolla, CA 92037. His Social Security number is 865-68-9635. In 2010, Kent’s W-2 as the c...May 18 2020