On January 1, 2022, Shadow Industries (lessor) leased equipm…

On January 1, 2022, Shadow Industries (lessor) leased equipment to Bone Co. (lessee) for a 5-year period under a non-cancelable agreement, after which the leased asset will revert back to Shadow Industries. The equipment costs Shadow industries $840,000 and normally sells for $1,116,581. Equal payments under the lease are $240,000 and are due on December 31 of each year, with the first payment made on January 1, 2022. The equipment has a useful life of 6 years. The equipment’s residual value is $120,000 at the end of the lease term The rate implicit in the lease used by the lessor is 8%, Bone Co.’s incremental borrowing rate is 10% and lessee is aware of lessor’s rate.   What amount would Bone record for the lease payable and right-of-use asset at inception of the agreement?     

Beats Corporation constructed a machine at a total cost of $…

Beats Corporation constructed a machine at a total cost of $206 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. By that method, accumulated depreciation at the end of 2023 is $97.2 million. The residual value is expected to be $8.0 million. At the beginning of 2024, Beats decided to change to the straight-line method. Ignoring income taxes, what will be Beats’ depreciation expense for 2024? Do not round intermediate calculations.

ROYAL Co.’s defined benefit pension plan had the information…

ROYAL Co.’s defined benefit pension plan had the information below for the current year:   Fair value of plan assets, beginning of the year $3,600,000 Expected rate of return 12% Employer contributions $450,000 Benefits paid $350,000 Fair value of plan assets, end of year $4,100,000                     What amount is the actual return on plan assets?

With a lease commencement date of January 1, 2024, GEO Compa…

With a lease commencement date of January 1, 2024, GEO Company leases equipment with a fair value of $2,450,000 to ALG Company. Equal payments under the lease are due on December 31 of each year, with the first payment made on January 1, 2024.   Annual rental payments                                                              $500,000 Present value of lease payments                                                $2,084,950 Lease term                                                                                         5 years Useful life of equipment                                                                   8 years Implicit interest rate in lease (known by Lopez)                               10%   Neither company considers the 5-year term to be a major part of the asset’s 8-year life. Nor do they consider the present value of the lease payments to be substantially all of the fair value of the asset. Considering only the above information, what amount of total lease-related expense should ALG report in its December 31, 2024 Income Statement?