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NutraLabs, Incorporated, leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. NutraLabs manufactured the machine at a cost of $4.5 million. The
NutraLabs, Incorporated, leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.
- NutraLabs manufactured the machine at a cost of $4.5 million.
- The five-year lease agreement calls for Werner to make quarterly lease payments of $371,971, 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?
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