At January 1, 2018, Caf Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $21,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was acquired recently by Crescent at a cost of $180,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $76,604.) Crescent seeks a 8% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What will be the effect of the lease on Caf Med's earnings for the first year (ignore taxes)? (Enter decreases with negative numbers) 2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Caf Med (ignore taxes)? (For all requirements, round your intermediate calculations to the nearest whole dollar amount.) 1. Effect on earnings 2. Lease payable balance (end of year) Right-of-use asset balance (end of year) NI 1.0% 1.5% 2.0% 2.5% 3.0% 3.9 4.0% 4,8% 5.0% 0.0% 6.0% 70% 8.0% 0.0% 100% 11.0% 12.0 200% 1 1.00000 100000 100000 100000 100000 100000 100000 100000 1.00000 100000 100000 100000 100000 1.000 1.000 1.00000 100000 100000 2 1.99010 1.09522 1.98070 1.97561 1.97007 196618 1.96154 1.95694 1952381.94787 1.94340 1.91458 1.92593 1.91747 1.90909 1.90000 1.99286 183333 3 2.97040 205588 2.04156 2.92742 2.91347 2.90000 2000 2.87267 2.85041 264632 2.893.79 280802 2.78326 2.75011 2.73554 2.71252 260005 2.52778 4 2.04099 291220 3.60 3.6560232061 200161 3.77500 3.74096 3.72325 3.60793 167301 162432 257710 3.53120 3.40585 3.44371 240183 310548 $ 4.90197 4.85438 4.80773 4.76197 4.71710 4.67308 4.62090 4.50751 4.54595 4.50515 4.46511 4.38721 4.31213 423072 4.16987 4.10245 4.03735 3.58873 6 58534) 5.78264 5.7134556450 5.57971 5.51505 5.45182 5.30908 5.32948 5.27021521236 5.100204.9927143005 4.79070 4.60590 4.0178 .00051 7 6.7954869719 6.6014) 6.50013 6.41719 6.32055 624214 6.15787 6,07569 59955) 5.91732 5.7654 542238 548502 5526 5.2 511141 4.33551 87 .72919759821 747190734039723028 7.11454 7.00205 60270 6.78637 6.66297658238 638920620617 601205 2 5.71220 5.56176460459 9 8 .451668.485038.325488.17014 8.01987.87 7.73274 759580 746321 7.33457 720979 6971306744 6.53482 6.33093 614612 5.96764 433716 10 M2 9 052 0.16224 8.97047 8.711 1.607608.43533 821079 8.10782 795220 7.801607 .51523 7.2460 6.90525 6.75902 653705 632875 503007 11 10.47130 10.22218 0.00250 0.75206 053070 311 0.1109091272 8.72173R53763 36000 802158 771008 741766 7.1445743103 402 61027 12 11.36763 11.07112 10.78685 10.51421 10.25262 10.00155 0.76048 0.52092 9.30641 0.00254 8.88687 8.498678.13096 7.80519 7.49506 7.20652 6.00770 5.32706 13 12 25508 11.90751 1157534 11.25776 10.95400 10.00 10.38507 10.11858 9.86325 0.61852 9.38.384 8.9426085208 8.160737.8110 749236 7.1907 5.47922 14 13.13374 12.7153 1234837 11987118 119 11 274 10.85AS 104285 10.30357 10.11708 2.85268 0.35765 8.40378 8. 0 8.10737.707 72355 55 15 14 00170 115 1210621269091 12.2007 11 2012 11.6312112228) 10 10 102000807454724424 8.78615 7 08187 762817 561057 16 14.36505 14.34323 13.84926 1338138 12.93794 12 51741 12.116) 11.73055 11 30 11 01758 1071225 10 10701 .55948 17 15.71787 15.13126 1457771 1405500 13.56110 13.09412 12.65230 12 21402 11,83727 11.46216 11.10500 10.44665 0.85137 18 1654225 15.00765 15 20187 14.71220 14,16612 120812 13.16567 12.70719 12.27407 11.841 1147726 10.76322 10 12164 1917.39927 16.67256 15.9920) 15.35136 14.75351 14.1898 13.65930 13.1500 12 950 12 2 11.02760 1105000 10.37189 2018 22601 1742617 16 67146 15.7100 15 3200 1470004 1412094 13 1912 13.08522 12 60165 12.15412 1133560 10.00 9.060 0.31256 0.5436) 9.7556) 9.95011 8.6060 819087 7.81086 5.67547 2.82171 8.37916 7.92399 5.72956 0.02155 8.54879 8.11063 5.77463 20141 810162 824067 5.81219 2 8.60929 65785. 21 19.04555 181664 17.35101658916 15.87747 15 21240 14500 1400704 13.45721 12050312 46002 11.50401 10 81815 10.12955 0.513 80 5058 25 22 24300 21.00041 10.01903 1 1499 17.93554 1705 162466 15 14.7986414151701355036 12.40 11.52876 10.70661 0.00474 0.34814 B7801293710 30 26 4579 24 37608 22.4 21.45055 20.18245 1003577 17.08.371 17.02189 16.14107 15.33310 14 50072 1327767 12.15841 11.19128 10 36951 9.65011 9.02181 5.97472 40 33.16303 30.36458 27.00250 25.73034 23.80822 22.10250 20.58443 10.22904 18.01704 1692166 15.94907 14.26400 12.67058 11.72552 1075696 0.01567 0.23303 5.99502 Required: 1. What will be the effect of the lease on Caf Med's earnings for the first year (ignore numbers) 2. What will be the balances in the balance sheet accounts related to the lease at the (For all requirements, round your intermediate calculations to the nearest whole do 1. Effect on earnings 2. Lease payable balance (end of year) Right-of-use asset balance (end of year)