{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T07:20:20-04:00", "answer_date": "2024-06-28 07:20:20", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4262269", "url": "\/study-help\/questions\/on-december-31-year-one-ames-leases-equipment-under-a-4262269", "question_creation_date_js": "2024-06-28T07:20:20-04:00", "question_creation_date": "Jun 28, 2024 07:20 AM", "meta_title": "[Solved] On December 31, Year One, Ames leases equ | SolutionInn", "meta_description": "Answer of - On December 31, Year One, Ames leases equipment under a capital lease for 10 years with annual payments of $50,000 beg | SolutionInn", "meta_keywords": "december,31,year,one,ames,leases,equipment,capital,lease,10,years,annual", "question_title_h1": "On December 31, Year One, Ames leases equipment under a capital lease for 10 years with annual payments of $50,000 beginning immediately. The present value", "question_title": "On December 31, Year One, Ames leases equipment under a capital lease", "question_title_for_js_snippet": "On December 31, Year One, Ames leases equipment under a capital lease for 10 years with annual payments of $50,000 beginning immediately The present value of an annuity due for 10 years at a reasonable interest rate of 12 percent is $350,000 The straight line method of depreciation is to be used for the equipment but the effective rate method is applied for interest recognition The asset must be returned to the owner after 10 years Currently, the December 31, Year Two balance sheet is being prepared By how much has the net liability been reduced from that amount which appeared on the December 31, Year One balance sheet Question 1 options $14,000 $8,000 $36,000 $42,000 Under the allowance method of recognizing doubtful accounts, the entry to write off an uncollectible account Question 3 options has no effect on net income decreases net income increases the allowance for doubtful accounts has no effect on the allowance for doubtful accounts Which of the following lease provisions would least likely cause a lease to be classified as a capital lease The Question 7 options collectibility of the lease payments by the lessor is unpredictable term of the lease is more than 75 percent of the estimated economic life of the leased property present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property lease contains a bargain purchase option A US company with the US dollar as its functional currency is preparing to report consolidated financial statements for Year One At the end of that year, because of a foreign subsidiary, the company has a translation adjustment account with an $18,000 credit balance In addition, the US company had a receivable for 100,000 lira from a customer in Italy This receivable was worth $11,000 when it was established on November 9 However, the currency exchange rates changed, and it was worth $14,000 when paid by the customer on January 30 of Year Two The 100,000 lira receivable was worth $13,000 on December 31, Year One What gain appears in this company's consolidated income statement for Year One Question 10 options $2,000 $ 0 $18,000 $21,000 An entity purchased shares of its $100 par stock for retirement that was originally issued at $200 per share The entity repurchased the stock for $250 per share Upon retirement, which of the following accounts would NOT be affected Question 18 options Treasury stock Paid in capital Common stock Retained earnings ", "question_description": "

<\/p>

On December 31, Year One, Ames leases equipment under a capital lease for 10 years with annual payments of $50,000 beginning immediately. The present value of an annuity due for 10 years at a reasonable interest rate of 12 percent is $350,000. The straight-line method of depreciation is to be used for the equipment but the effective rate method is applied for interest recognition. The asset must be returned to the owner after 10 years. Currently, the December 31, Year Two balance sheet is being prepared.<\/p>

By how much has the net liability been reduced from that amount which appeared on the December 31, Year One balance sheet?<\/p>

Question 1 options:<\/p>

$14,000<\/p>

$8,000<\/p>

$36,000<\/p>

$42,000<\/p>

<\/p>

Under the allowance method of recognizing doubtful accounts, the entry to write off an uncollectible account:<\/p>

Question 3 options:<\/p>

has no effect on net income.<\/p>

decreases net income.<\/p>

increases the allowance for doubtful accounts.<\/p>

has no effect on the allowance for doubtful accounts.<\/p>

<\/p>

<\/p>

Which of the following lease provisions would least likely cause a lease to be classified as a capital lease? The:<\/p>

Question 7 options:<\/p>

collectibility of the lease payments by the lessor is unpredictable.<\/p>

term of the lease is more than 75 percent of the estimated economic life of the leased property.<\/p>

present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property.<\/p>

lease contains a bargain purchase option.<\/p>

<\/p>

A US company with the US dollar as its functional currency is preparing to report consolidated financial statements for Year One. At the end of that year, because of a foreign subsidiary, the company has a translation adjustment account with an $18,000 credit balance. In addition, the US company had a receivable for 100,000 lira from a customer in Italy. This receivable was worth $11,000 when it was established on November 9. However, the currency exchange rates changed, and it was worth $14,000 when paid by the customer on January 30 of Year Two. The 100,000 lira receivable was worth $13,000 on December 31, Year One. What gain appears in this company's consolidated income statement for Year One?<\/p>

Question 10 options:<\/p>

$2,000<\/p>

$-0-<\/p>

$18,000<\/p>

$21,000<\/p>

<\/p>

<\/p>

An entity purchased shares of its $100 par stock for retirement that was originally issued at $200 per share. The entity repurchased the stock for $250 per share. Upon retirement, which of the following accounts would NOT be affected?<\/p>

Question 18 options:<\/p>

Treasury stock.<\/p>

Paid-in capital.<\/p>

Common stock.<\/p>

Retained earnings.<\/p>", "transcribed_text": "", "related_book": { "title": "Managerial Accounting Tools for Business Decision Making ", "isbn": "1118856996, 978-1118856994", "edition": "4th Canadian edition", "authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1190.jpg", "uri": "\/textbooks\/managerial-accounting-tools-for-business-decision-making-4th-canadian-edition-1190", "see_more_uri": "" }, "free_related_book": { "isbn": "9629962608", "uri": "\/textbooks\/development-appraisal-of-land-in-hong-kong-revised-edition-978-9629962609-285882", "name": "Development Appraisal Of Land In Hong Kong", "edition": "Revised Edition" }, "question_posted": "2024-06-28 07:20:20", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-September-13", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/a-client-beth-voga-asks-for-advice-she-tells-you", "description": "A client, Beth Voga, asks for advice. She tells you that her grandmother, a widowed resident of Montana, has no will. She asks whether any portion of her grandmothers estate will pass to her (Beths)...", "stars": 3 }, { "url": "\/study-help\/psychology\/where-do-you-see-yourself-in-510-years-1980732", "description": "Where do you see yourself in 5\/10 years?", "stars": 3 }, { "url": "\/1-golfers-who-take-lessons-and-purchase-other-services-from", "description": "1. Golfers who take lessons and purchase other services from the Annika Academy presumably share at least some of Sorenstams passion for winning. Would toning down the competitive aspect of...", "stars": 3 }, { "url": "\/study-help\/questions\/perpetual-inventory-using-fifo-the-following-units-of-a-particular-9869694", "description": "Perpetual Inventory Using FIFO The following units of a particular item were available for sale during the calendar year: Jan. 1 Inventory 4,200 units at $39 Apr. 19 Sale 2,400 units June 30 Purchase...", "stars": 3 }, { "url": "\/study-help\/questions\/project-worksheet-are-the-important-questions-anything-else-answered-7525608", "description": "Project Worksheet (???***___***??? are the important questions, anything else answered would help) go to the following web site: https:\/\/finance.yahoo.com\/ Type Amazon in the search box. Then click...", "stars": 3 }, { "url": "\/study-help\/questions\/explain-the-stuxnet-virus-be-sure-to-cover-what-its-1000430", "description": "Explain the Stuxnet virus. Be sure to cover what its goals were thought to be, how successful it was in accomplishing those goals, the possible methods of initial system infections, how it was...", "stars": 3 }, { "url": "\/study-help\/questions\/anna-luke-charlotte-diego-and-emma-share-ownership-of-an-2109083", "description": "Anna, Luke, Charlotte, Diego and Emma share ownership of an apartment building under a tenancy in common, with equal shares of 20%. If Charlotte dies, which one of the following represents the...", "stars": 3 }, { "url": "\/study-help\/questions\/brainstorm-how-mental-health-and-wellness-professionals-can-enhance-the-3240759", "description": "Brainstorm how mental health and wellness professionals can enhance the success and longevity of nonprofit organizations in this field through effective budgeting practices. Consider the role of...", "stars": 3 }, { "url": "\/study-help\/questions\/question-9-explain-by-means-of-what-will-you-prepare-1008737", "description": "Question 9 Explain by means of what will you prepare the compressed air systems for service? (5)", "stars": 3 }, { "url": "\/study-help\/questions\/given-that-qx-10x6-2x2-find-91-6-using-1002201", "description": "Given that q(x) = 10x-6 2x-2 find (91) (6) using the Inverse Function Theorem. Note that q(3) = 6. (Do not include \"(q) (6) =\" in your answer.)", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/determine-whether-the-following-graph-can-represent-a-normal-density-4262268", "next": "\/study-help\/questions\/usbased-chil-products-ltd-bottles-and-sells-hot-pepper-sauce-4262270" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "On December 31, Year One, Ames leases equipment under a capital lease", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/on-december-31-year-one-ames-leases-equipment-under-a-4262269" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }