Question
Maris Co. purchased a machine on January 1, 2018, for $950,000 for the express purpose of leasing it. The machine is expected to have a
Maris Co. purchased a machine on January 1, 2018, for $950,000 for the express purpose of leasing it. The machine is expected to have a 5-year life, no salvage value, and be depreciated on a straight-line monthly basis. On April 1, 2018, under a cancelable lease, Maris leased the machine to Dunbar Company for $452,800 a year for a 6-year period ending March 31, 2022. Maris incurred total maintenance and other related costs under the provisions of the lease of $17,400 relating to the year ended December 31, 2018. Harley paid $452,800 to Maris on April 1, 2018. **Under the operating method, what should be the income before income taxes derived by Maris Co. from this lease for the year ended December 31, 2018? (Round answer to 0 decimal places, e.g., $1,575.)** Income Before Income Taxes:_______?
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