During the lease term, the lessor receives interest income, calculated by taking the internal rate of return of the asset. The cash inflow equals the lease payments and the cash outflow is equal to the book value of the asset.
The net investment in the lease at the end of Year 1 is determined to be $712,599. The carrying value of net investment in the lease at December 31, Year 1 equals $712,599. Alyssa Pfaff is a trainee accountant in the financial planning and analysis department of Bunge Co […]
Second, it can refer to the practice of expensing the cost of an intangible asset over time. The IRS has schedules that dictate the total number of years in which to expense tangible and intangible assets for tax purposes. Another definition of amortization is the process used for paying off loans. The loan amortization process includes fixed payments each pay period with varying interest, depending on the balance. Negative amortization for loans happens when the payments are smaller (more&hell […]
Also in accrual accounting, expenses are matched to the revenue they produce. Say the carpet-cleaning job required a special disposable attachment for your equipment. You’d record that expense at the same time you record the revenue for the job — regardless of when you actually bought the attachment. This means you might end up paying taxes on money that you don’t actually have on hand yet. Lenders and investors have a clearer view into your company’s profitability if yo […]
There are many operations that can be applied to raw materials such as welding, cutting and painting. It is important to differentiate between direct materials and indirect materials. Understanding every aspect of your company is vital for any aspiring business owner. This can bring substantially more accurate, precise calculations when estimating cost. In this example, the total production costs are $900 per month in fixed expenses plus $10 in variable expenses for (more…) […]
The resulting weighted unit contribution margins for all products are then added together. A company may express a break-even point in dollars of sales revenue or number of units produced or sold. No matter how a company expresses its break-even point, it is still the point of zero income or loss. To solve this problem, management must identify and separate costs into fixed and variable categories. A company breaks even for a given period when sales revenue and costs charged to that period are […]
Comparing your budget with your actuals is an important step to gauge the effectiveness of a budget. It’s unrealistic to expect that you will achieve every business goal and reach your estimates every month. In an annual cycle, there will be months where your business will be booming, and there may be a few months where sales are slow. Due to seasonal inconsistency and industry trends, you will have to spend cash effectively so that the business isn’t at risk of shutting down during […]
They submit the detailed report of the auditors so that their performance can be verified. Standards of Reporting1.The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles . The auditor should be aware of and consider interpretive publications applicable to his or her audit. If the auditor does not apply the auditing guidance included in an applicable interpretive publication, the auditor should be prepared to explain how […]
Dummies helps everyone be more knowledgeable and confident in applying what they know. Where the amount paid doesn’t exactly match the total value, the amount left over is paid from the last invoice selected.
Enter the expense details such as the date, the category the expense falls under, and the expense amount. On the opening screen, you’ll see an icon labeled Snap Receipt. Click on it, and your phone’s camera will open (you’ll be asked for permission to use it). Docu […]
When the program was conceived, high-wage earners were exempt from paying into the fund and from receiving Social Security benefits. The Internal Revenue Service provides an Income Tax Withholding Assistant to help you determine how much tax you need to withhold and report as an employer. Depending on income, employers fall into different tax brackets. Ontario applies a health premium tax to all payrolls on a sliding scale up to $900 per year. For example, if you were a semiweekly depositor who […]
The amount to sell upfront is usually a function of your skittishness over the current value of your stock and whether you need the money to make a significant purchase in the near-term. It’s hard to take emotions out of your own personal financial decisions, so our research team conducted an analysis using historical data to illustrate the best scenarios. A great way to avoid worrying about when to sell is by automating the decision. A vendor note is a short-term loan made to a customer […]
