Question
NutraLabs, Incorporated, leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. NutraLabs manufactured the machine at a cost of $5.4 million. The
NutraLabs, Incorporated, leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.
NutraLabs manufactured the machine at a cost of $5.4 million.
The five-year lease agreement calls for Werner to make quarterly lease payments of $420,914, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024.
NutraLabs implicit interest rate is 12%.
The useful life of the equipment is five years.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
Determine the price at which NutraLabs is selling the equipment (present value of the lease payments) on September 30, 2024.
What pretax amounts related to the lease would NutraLabs report in its balance sheet on December 31, 2024?
What pretax amounts related to the lease would NutraLabs report in its income statement for the year ended December 31, 2024?
What pretax amounts related to the lease would NutraLabs report in its statement of cash flows for the year ended December 31, 2024?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started