Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.• Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million.• The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30,December 31, March 31, and June 30, with the first payment on September 30, 2024.• Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1)Required:1. What pretax amounts related to the lease would Abbott report in its balance sheet on December 31, 2024?2. What pretax amounts related to the lease would Abbott report in its income statement for the year ended December 31, 2024?3. What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31,2024?Complete this question by entering your answers in the tabs below.Req 1 and 2What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31,2024?Req 3Note: Note: Enter your answers in whole dollars and not in millions of dollars. Round your intermediate and final answers tonearest whole dollar.Finance leaseInterest portionPrincipal portion$$$6,349,980 significant noncash investing activity236,028 cash inflows from operating activities662,518 cash inflows from investing activitiesShow less

An agreement of contract that is prepared to transfer the right to use the resources for a…

Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. • Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. • Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.

Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. • Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6.35 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $449,273, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. • Abbott's implicit interest rate is 16%. The useful life of the equipment is five years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $5.95 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $420,972, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Abbott's implicit interest rate is 16%. The useful life of the equipment is five years. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: What pretax amounts related to the lease would Abbott report in its balance sheet on December 31, 2024? What pretax amounts related to the lease would Abbott report in its income statement for the year ended December 31, 2024? What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31, 2024?
k t nces NutraLabs, Incorporated, leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. • NutraLabs manufactured the machine at a cost of $4.85 million. • The five-year lease agreement calls for Werner to make quarterly lease payments of $375,234, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. NutraLabs' implicit interest rate is 8%. . The useful life of the equipment is five years. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price at which NutraLabs is "selling" the equipment (present value of the lease payments) on September 30, 2024. 2. What pretax amounts related to the lease would NutraLabs report in its balance sheet on December 31, 2024? 3. What pretax amounts related to the lease would NutraLabs report in its income statement for the year ended December 31, 2024? 4. What pretax amounts…
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Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024. Abbott purchased the machine from NutraLabs, Incorporated, at a cost of $6 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $391,548, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Abbott's implicit interest rate is 12%. The useful life of the equipment is five years. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: What pretax amounts related to the lease would Abbott report in its balance sheet on December 31, 2024? What pretax amounts related to the lease would Abbott report in its income statement for the year ended December 31, 2024? What pretax amounts related to the lease would Abbott report in its statement of cash flows for the year ended December 31, 2024? Complete this question by…
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Federated Fabrications leased a tooling machine on January 1, 2024, for a three-year period ending December 31, 2026. ⚫ The lease agreement specified annual payments of $44,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2025. • The company had the option to purchase the machine on December 30, 2026, for $53,000 when its fair value was expected to be $68,000, a sufficient difference that exercise seems reasonably certain. • The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's implicit rate of return was 9%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. 2. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. 3. Prepare the…
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Communication S.A. signed a contract with Satellite Leasing Corporation at 1st January 2019 to lease a machine. The agreement consists in nine equal annual payments of $18,000 at the beginning of each year with an interest rate of 5%. The yearly rental payment includes $3,000 of executory costs related to taxes on the machine. There is an option to purchase the machine at the end of the lease term for $5,000. The machine has an estimated useful life of 10 years, no residual value and uses straight line depreciation method. Consider a PVIF (n=9, i=5%) of 0.6446 and PVIFA (n=9, i=5%) of 7.1078. The accounting balance day for Communication S.A. is 31 of December. Required a) Calculate the present value of the minimum lease payment. b) Prepare the journal entries for the lessee to reflect the signing of the lease agreement, payment and expenses for the year 2019. c) Prepare the journal entries for the lessor to reflect the signing of the lease agreement, payment and revenues for…
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