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Exercise 21-13 On January 1, 2017, a machine Was purchased for $874.400 by Wildhorse Co. The machine Is expected to nave an y Sa d
Exercise 21-13 On January 1, 2017, a machine Was purchased for $874.400 by Wildhorse Co. The machine Is expected to nave an y Sa d It is to be depreciated on a straight-line basis. 8-vear life with salvage value. machine wae chffigid ary 1, 2017, at an annual rental lease $213,600. Other relevant information is as follows. Ja 1. The lease term is for 3 years. 2. Wildhorse Co. incurred maintenance and other executory costs of $25,300 in 2017 related to this lease 3. The machine could have been sold by Wildhorse Co. for $914,400 instead of leasing it. 4. Sheffield is required to pay a rent security deposit of $35,600 and to prepay the last month's rent of $17,800. (a) How much should Wildhorse Co. report as income before income tax on this lease for 2017? Income before income tax (b) What amount should Sheffield Inc. report for rent expense for 2017 on this lease? Rent expense
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