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Leasing

Accounting: Leases, pensions, equity, multiple entities

Answer each question with references; references have to be work citied within the paragraphs. 1. Assess the current accounting practices regarding leases and make a recommendation for improvement. 2. Assess the current accounting practices regarding pensions and make a recommendation for improvement. 3. Assess th

Discuss the following cost recovery questions: Whether property that is classified as personal is subject to cost recovery. If a taxpayer does not take any cost recovery on an asset during the year, what will be the impact on the basis of the asset? The computation of cost recovery in the year an asset is placed in service when the half-year convention is used. Whether the acquisition of real property affects the 40% test to determine whether the mid-quarter convention must be used. 2. Discuss the following cost recovery questions: The definition of taxable income as it is used in limiting the Section 179 expensing amount. The implications of an automobile used in a trade-or-business having a gross vehicle weight exceeding 6,000 pounds. The purpose of the lease inclusion amount and explain how it is determined with respect to leased passenger automobiles. The amortization period of a Section 197 intangible if the actual useful life is less than 15 years. 3. Lyle and Joan are married and file a joint return for the year. Both incur work-related expenses that are not reimbursed. If Lyle is employed and Joan is self-employed, how should the expenses be handled for tax purposes? 4. In connection with the office in the home deduction, comment on the following factors: Taxpayer claims the standard deduction The office is also used to pay personal bills The expenses exceed the income from the business Taxpayer rents rather than owns, the home 5. Comment on the deductibility of each of the following items; Expenses incurred by taxpayer, a member of the New Mexico National Guard, to participate in a three-day training session conducted in Texas. Dues to a teamster's union paid by a truck driver Computer supplies purchased by a college professor for use in the graduate seminars she teaches Fee paid to take the state bar exam. Taxpayer is employed as a paralegal by a law firm.

1. Discuss the following cost recovery questions: Whether property that is classified as personal is subject to cost recovery. If a taxpayer does not take any cost recovery on an asset during the year, what will be the impact on the basis of the asset? The computation of cost recovery in the year an asset is placed in

A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months - not per month), of which $8,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $6,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.

A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months - not per month), of which $8,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $6,000 in revenues (TR). So, considering only this information,

Accounting Appendix

Hall, Inc. agrees to lease equipment from White Inc. for 10 years for $50,000 at the end of each year. The equipment has a fair value of $350,000 and an estimated useful life of 10 years. The lease includes a guaranteed residual value of $20,000. In addition to the lease payments, Hall will pay $10,000 per year for a maintenance

If the Bean Company sells an asset to Corn Company for a pro

If the Bean Company sells an asset to Corn Company for a profit of $175,000 and immediately leases it back with a capital lease, the gain is recognized by Bean: immediately as an extraordinary gain. immediately as an ordinary gain. over the life of the lease in proportion to the rental payment.

Forecast an Income Statement, Balance Sheet, Cash Flows, Shares

Please see attachment for proper format, and provide examples of solving it. 1. Forecasting an Income Statement Abercrombie & Fitch? reports the following income statements. Income Statement, For Fiscal Years Ended ($ thousands) 2008 2007 Net sales $3,657,847 $3,318,158 Cost of goods sold 1,238,480

On December 31, 2009, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she billed $360,000 for her accounting services. She had two employees: a bookkeeper and a clerical assistant. In addition to her monthly salary of $8,000, Ms. Chen paid annual salaries of $48,000 and $36,000 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,600 for the year. Expenses for office supplies, including postage, totaled $10,400 for the year. In addition, Ms. Chen spent $17,000 during the year on tax-deductible travel and entertainment associated with client visits and new business development. Lease payments for the office space rented (a tax- deductible expense) were $2,700 per month. Depreciation expense on the office furniture and fixtures was $15,600 for the year. During the year, Ms. Chen paid interest of $15,000 on the $120,000 borrowed to start the business. She paid an average tax rate of 30% during 2009. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2009. b. Evaluate her 2009 financial performance.

On December 31, 2009, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she billed $360,000 for her accounting services. She had two employees: a bookkeeper and a clerical assistant. In addition to her monthly salary of $8,000, Ms. Chen paid annual salaries

Financial Statement Analysis for Apple, Inc

Analyze the financial statements of a publicly traded company. Obtain an annual report from a publicly traded corporation that is interesting to you. Be sure the company has property and equipment, intangible assets, and long-term debt on their balance sheet. Using techniques you have learned, respond to the following questio

Lease Analysis and Merger Questions

See the attached file. Capital Budgeting 1. What is a sale and lease back and why would a corporation do this? 2. Why might a lease be easier to finance (or do) than a straight borrowing for the purchase of an asset? Explain two reasons 3. When should the cancellation provision be negotiated (before or after the le

Acme Company stock price and common stock.

The Acme Company, whose stock price is now $25, needs to raise $20million in common stock. Underwriters have informed the firm's management that they must price the new issue to the public at $22 per share because of signaling effects. The underwriter's compensation will be 5% of the issue price. So Beranek will net $20.90 per

Installment Liquidation Retail Furniture

Hann, Murphy, and Ryan have operated a retail furniture store for the past 30 years. Their business has been unprofitable for several years, since several large discount furniture stores opened in thier sales territory. The partners recognize that they will be unable to compete with the larger chain stores and decide that since

Create outline: Come up with arguments for both landlord and tenant that could be argued in court according to the fact pattern and lease (attached). Act as Judge and offer reasons for your ruling (documents attached).

LANDLORD-TENANT DISPUTE The situation is as follows: Fred and Wilma Flintstone rent a one-bedroom apartment in Bedrock from Fred's former boss Mr. Slate while their home is undergoing repairs after a major earthquake. The lease is signed on 10-13-09 and Fred, his wife Wilma, their daughter Pebbles and there pet Dino move i

Mavis Company - Variable versus absorption costing

1. Variable costing versus absorption costing. The Mavis Company uses an absorption- costing system based on standard costs. Total variable manufacturing cost, including direct material cost, is $3 per unit; the standard production rate is 10 units per machine- hour. Total budgeted and actual fixed manufacturing overhead costs

Determining if a Lease is Treated as a Capital Lease or Operating Lease

1. Please explain in your own words the four criteria used for determining if a lease is to be treated as a capital lease, as opposed to as an operating lease. 2. Please discuss contingencies and how they are reported on financial statements. What conditions must be met before a contingency can be charged against income?

Compute the expected returns for both securities.

1). Consider the following data for two risk factors (1 and 2) and two securities (J and L). rf = 0.05 bJ1 = 0.80 rm1 = 0.02 bJ2 = 1.40 rm2 = 0.04 bL1 = 1.60 bL2 = 2.25 a. Compute the expected returns for both securities. b. Suppose that security J is currently priced a

Leasing equipment versus buying equipment

I need help getting started on my paper. I need to describe the factors that need to be considered if a company was looking to purchase new equipment and they were going to lease the equipment versus buying the equipment.

NPV and IRR for business decision

See attached file. A local businessman decides to purchase a specialized piece of production equipment at a capital cost of $403,000. The businessman manufactures cardboard boxes, and a particular machine is essential in the production process. The firm will save annual machine leasing costs of $104,000 per year. The machine

The Chicago Omni Hotel - discuss the relative performance of each profit center

The Chicago Omni Hotel is a 750-room luxury hotel offering guests the finest facilities in downtown Chicago. The hotel is organized into four departments: lodging, dining, catering, and retail stores. Each of these departments is treated as a profit center. Lodging is the largest profit center and is responsible for room rent

The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the year. Her current prices are competitive with nearby restaurants of similar quality.However, she is now considering raising her prices by 20 percent to offset the increase in her monthly rent. Would you recommend that she raise prices? Explain.

The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the year. Her current prices are competitive with nearby restaurants of similar quality.However, she is now considering raising her pric

Differential analysis report involving opportunity costs

On March 1, Midway Distribution Company is considering leasing a building and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $750,000 of 7% U.S. Treasury bonds that mature in 14 years. The bonds could be purchased at face value. The following data have be

Johnson Corporation

To meet the need for its expanding operations, Johnson Corporation obtained a charter for a separate corporation whose purpose was to buy a land site, build and equip a new building, and lease the entire facility to Johnson Corporation for a period of twenty years. Rental to be paid by Johnson was set at an amount sufficient to