Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ajax company manufactures equipment that they sell

Ajax Company manufactures equipment that they sell or lease. On January 1, 2019, Ajax leased equipment...

80.2K

Verified Solution

Question

Accounting

Ajax Company manufactures equipment that they sell or lease. OnJanuary 1, 2019, Ajax leased equipment to Comet Company for afive-year period after which ownership of the leased asset will betransferred to Comet. The lease calls for equal annual payments of$50,000. The first payment is due on January 1, 2019. Thereafter,the payments are due on December 31st of each year with the secondpayment due on December 31, 2019. The equipment cost Ajax $176,000to produce. The implicit interest rate for the lease is 5½ percent.For the year ended December 31, 2019, what amount of total income(the sum of gross profit on the sale and interest income) relatedto this lease transaction should Ajax report?

Question 6 options:

$9,639

$58,897

$61,647

$49,258

kj. is the lessee under a finance lease with a provision topurchase the leased asset at the end of the lease term for abargain price. The depreciation (leased asset amortization) periodused by the kj must be

either the term of the lease or the useful life of the leasedasset, whichever is shorter.

the term of the lease.

the useful life of the leased asset.

whatever depreciation period the lessor was using.

Answer & Explanation Solved by verified expert
3.9 Ratings (605 Votes)
ANSWERDEAR STUDENTIF YOU    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return...

Biology
1.2K views

Describe the ecological topic and relates the most to the zooinverse project that you conducted. Full credit...

Physics
1.2K views

Students are sitting in a classroom and listening to a lecture. If the lecture has a...

Psychology
1.2K views

What were Locke’s three primary reasons for keeping government and religion separate? Which one of those...

Biology
1.2K views

A rancher would like to produce a buffalo with medium length hair but currently has...

Physics
1.2K views

A wire of length 4 cm is placed inside t he solenoid near the centre...

Basic Math
1.2K views

A ship left the bay and has sailed toward 30 degrees to the east for...

Accounting
1.2K views

Presented below is the information related to A&O Corporation

Accounting
1.2K views

A What do you think are being described in each card? 1/5 This is preconceived...

Accounting
1.2K views

Current Attempt in Progress Your answer is partially correct. The Dynatech Corporation produces an executive...

Accounting
1.2K views

Flora's Gifts reported the following current-month data for its only product. The company uses a...

Accounting
1.2K views

The recent collapse in the banking sector caused many banks to close and many others...