(Solution) 15-43 Name: Enter The Appropriate Amounts/formulas In The Blue-shaded Cells. The Word "Wrong" Will Appear To The Left Of Incorrect Entries.... | Snapessays.com


(Solution) 15-43 Name: Enter the appropriate amounts/formulas in the blue-shaded cells. The word "Wrong" will appear to the left of incorrect entries....


Acme Enterprises leased equipment from Monument Equipment Co. on January 1, 2015. The terms of the lease agreement require five annual payments of $20, 000 with the first payment being made on January 1, 2015, and each subsequent payment being made on December 31 of each year. Because the equipment has an expected useful life of five years, the lease qualifies as a capital lease for Acme. Acme does not know the Monument's implicit interest rate and therefore uses its own incremental borrowing rate of 12% to calculate the present value of the lease payments. Acme uses the sum-of-the-years'-digits method for amortizing leased assets. The expected salvage value of the leased asset is $0.1. Prepare a schedule that shows the lease obligation balance in each year of the lease.2. Prepare an asset amortization schedule for the leased asset.3. Compare the amount shown on the year-end balance sheet for the leased asset with that of the lease obligation for the years 2015 through 2019 and explain why the amounts differ.Check Figure: Dec. 31, 2017, Book Value of Leased Asser=$16150I attached the excel sheet for reference.15-43

 

Name:

 

Enter the appropriate amounts/formulas in the blue-shaded cells.

 

The word “Wrong” will appear to the left of incorrect entries.

 

The essay answer will not be graded.

 

1.

 

Computation of lease obligation:

 

Amount

 

x

 

Factor

 

First payment

 

Remaining four payments

 

Present value of lease obligation

 

ACME ENTERPRISES

 

Schedule of Lease payments

 

(5-Year Lease)

 

Lease Payment

 

Date

 

Description

 

Amount

 

Principal

 

Interest

 

01/01/15

 

Initial balance

 

01/01/15

 

Payment

 

12/31/15

 

Payment

 

12/31/15

 

Payment

 

12/31/17

 

Payment

 

12/31/18

 

Payment

 

2.

 

ACME ENTERPRISES

 

Lease Amortization Schedule

 

Date

 

Asset Cost

 

Amortization Factor

 

Amortization

 

Jan. 1, 2015

 

Dec. 31, 2015

 

Dec. 31, 2016

 

Dec. 31, 2017

 

Dec. 31, 2018

 

Dec. 31, 2019

 

3.

 

Book Value of

 

Book Value of

 

Date

 

Leased Asset

 

Lease Obligation

 

Jan. 1, 2015

 

Dec. 31, 2015

 

Dec. 31, 2016

 

Dec. 31, 2017

 

Dec. 31, 2018

 

Dec. 31, 2019

 


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This question was answered on: May 23, 2022

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