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What I just watched a CPA review video about Sale Lease Back. If the lease back is a large % of the usable life of the asset... OR..OR.. 90% of PV of lease payments of Fair Value of the asset, it qualifies as a "non minor" interest and you would defer the gains or loss against revenue or expenses. Since, 180,000 payment/1,600,000 fair value is 11% which qualifies. Is this question designed make sure you know it. Or, did I miss understand the rule?
"Assume the numbers a computed appropriately". Really? From this statement we are to assume to know you mean that the table below is not needed? Too many times it seems the point of these questions has very little to do with actual accounting and more designed to mess you up with assumptions in the wording of the question. I really prey and hope the exam is not so vague in what it is asking.
I was surprised to see that UCC allows the sellers to amend the contract if the prices are unfavorable to them. I always thought that a contract can be amended (to increase the price) if the seller is giving additional consideration to the buyer. I would be interested to know what others think.
It is my understanding that of the 10,000 in beginning WIP ... 60% was completed last period and 40% will be included in this period's cost = 4,000 Now, 50,000 was started and completed this period which would mean we need to minus the 10,000 that was completed last period= 40,000 Now, in ending WIP we have 2,000 that was 40% completed = 800 4000+40000+800= 44,800 ---> That would be the equivalent units under FIFO It appears the equivalent units in the solution is double counting the amount in the beginning WIP ... Could you clarify for me please. Thanks !