|
|
|
 Topic: leases ( Topic Closed)
|
 
|
| Author |
|
to_be_cpa
Newbie
Joined: 23 Jun 2009
Location: United States
Online Status: Offline
Posts: 34
|
| Posted: 07 May 2010 at 15:53 | IP Logged
|
|
|
The following information pertains to a sale and leaseback
of equipment by Mega Co. on December 31, 2003:
Sales price $400,000
Carrying amount $300,000
Monthly lease payment $3,250
Present value of lease payments $36,900
Estimated remaining life 25 years
Lease term 1 year
Implicit rate 12%
What amount of deferred gain on the sale should Mega report
at December 31, 2003?
a. $0
b. $ 36,900
c. $ 63,100
d. $100,000
Can anyone answer to this questionalong with explaination?
I believe, minor portion of asset right has been retained n hence no deferral of gain(entire gain has to be recognized in full immediately)...n hence answer zero.....but answer to this is $100000.
Kindly help!!!
|
| Back to Top |
|
| |
CPAhamster
Contributor
Joined: 24 Oct 2009
Location: United States
Online Status: Offline
Posts: 52
|
| Posted: 07 May 2010 at 16:24 | IP Logged
|
|
|
The PV of lease payment is less than 10% of FMV of lease back property. As a result, a full gain of 100,000 is recognized, none is deferred.
The answer is A (zero)
|
| Back to Top |
|
| |
to_be_cpa
Newbie
Joined: 23 Jun 2009
Location: United States
Online Status: Offline
Posts: 34
|
| Posted: 07 May 2010 at 16:26 | IP Logged
|
|
|
thanx cpahamster...
|
| Back to Top |
|
| |
|
|
Sorry, you can NOT post a reply.
This topic is closed.
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum
|
 Copyright ©2001-2010 Web Wiz Guide
This page was generated in 0.0938 seconds.
|
Active Topics 
Memberlist 
Search 
Help
Register 
Login
