Question 226
On January 2, 2002, Heather Ltd. signed a ten-year noncancelable lease for a passenger ferry. The lease stipulated annual payments of $70,000 starting at the end of the first year, with title passing to
Heather at the expiration of the lease. Heather treated this transaction as a capital lease.
The ferry has an estimated useful life of 15 years, with no residual value. Heather uses straight-line amortization for all of its capital assets. Aggregate lease payments were determined to have a present value of $420,000, based on implicit interest of 10%.
In its 2002 income statement, what amount of amortization expense should Heather report from this lease transaction?
Heather at the expiration of the lease. Heather treated this transaction as a capital lease.
The ferry has an estimated useful life of 15 years, with no residual value. Heather uses straight-line amortization for all of its capital assets. Aggregate lease payments were determined to have a present value of $420,000, based on implicit interest of 10%.
In its 2002 income statement, what amount of amortization expense should Heather report from this lease transaction?
Question 227
Suppose a t-test for the hypothesis that H(O): u = 0 vs. H(A): u<> 0 is carried out and we find t(obs.) =
1 .8. The descriptive significance level of the test is:
1 .8. The descriptive significance level of the test is:
Question 228
Agency Rent-A-Car reports cash flows from acquisitions and sales of Rental Automobiles (RA) as investing activities. It provides an unclassified balance sheet, with RA reported under Property and
Equipment and amounting to at least 49% of total assets in 2010; car rentals are 77% of total revenue.
Net cash received on RA transactions of $5.751 million ($68.96 million realized on sales less $63.21 million spent on purchases) is highly material to Agency's net $9.06 million investing cash outflow, less so to the $83.15 million reported operating cash flow. Agency's rental fleet turns over about every other year.
The predominance of rental revenues and low RA turnover supports investing activity classification. The classification has a material effect on reported operating cash flow and investing cash flow. Reclassifying
Agency's $5.75 million RA net cash inflow from investing to operating will ______ its net investing cash flow by 63% percent while ______ operating cash flow by 7%.
Equipment and amounting to at least 49% of total assets in 2010; car rentals are 77% of total revenue.
Net cash received on RA transactions of $5.751 million ($68.96 million realized on sales less $63.21 million spent on purchases) is highly material to Agency's net $9.06 million investing cash outflow, less so to the $83.15 million reported operating cash flow. Agency's rental fleet turns over about every other year.
The predominance of rental revenues and low RA turnover supports investing activity classification. The classification has a material effect on reported operating cash flow and investing cash flow. Reclassifying
Agency's $5.75 million RA net cash inflow from investing to operating will ______ its net investing cash flow by 63% percent while ______ operating cash flow by 7%.
Question 229
Which one is generally considered to be a leading indicator?
Question 230
Jumbo, Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 in January, $12,000 in February, and $8,000 in March. The firm's COGS in any given month is equal to
7 0% of the next month's sales. The firm collects its receivables in 60 days and pays its payables in 30 days. The firm begins January 1 with $10,000 in cash. All sales and purchases are on credit. There are no other costs or revenues. What is Jumbo's accounts payable at the end of January? Assume there are 30 days in every month.
7 0% of the next month's sales. The firm collects its receivables in 60 days and pays its payables in 30 days. The firm begins January 1 with $10,000 in cash. All sales and purchases are on credit. There are no other costs or revenues. What is Jumbo's accounts payable at the end of January? Assume there are 30 days in every month.