Answer :-
( a ) :-
Particulars | Amount |
Monthly lease payments | $19,300 |
Number of months ( March - December ) | 10 months |
Total rent expense |
= $19,300 * 10 = $193,000 |
( b ) :-
Particulars | Amount |
Rent revenue |
= $19,300 * 10 months = $193,000 |
Commission expense |
= [ $31,680 / ( 4 years * 12 months ) ] * 10 = [ $31,680 / 48 ] * 10 = $660 * 10 = $6,600 |
Depreciation expense |
= [ $1,563,600 / [ 10 years * 12 months ] ] * 10 = [ $1,563,600 / 120 ] * 10 = $13,030 * 10 = $130,300 |
Income |
= $193,000 - [ $6,600 + $130,300 ] = $193,000 - $136,900 = $56,100 |
Exercise 21-14 February 20, 2017, Vaughn Inc. purchased a machine for $1,563,600 for the purpose of...
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