At january 1, 2018, café med leased restaurant equipment from crescent corporation under a nine-year lease agreement. the lease agreement specifies annual payments of $28,000 beginning january 1, 2018, the beginning of the lease, and at each december 31 thereafter through 2025. the equipment was acquired recently by crescent at a cost of $207,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $69,847.) crescent seeks a 10% return on its lease investments. by this arrangement, the lease is deemed to be a finance lease.

1. what will be the effect of the lease on café med’s earnings for the first year (ignore taxes)? (enter decreases with negative numbers.)
2. what will be the balances in the balance sheet accounts related to the lease at the end of the first year of café med (ignore taxes)?

When an interest-bearing note comes due and is uncollectible, the journal entry includes debiting

You have just been hired as a financial analyst for barrington industries. unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. so, your first job will be to recreate the firm's cash flow statement for the year just ended. the firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. it earned $5 million in net income during the year but paid $800,000 in dividends to common shareholders. throughout the year, the firm purchased $5.5 million of machinery that was needed for a new project. you have just spoken to the firm's accountants and learned that annual depreciation expense for the year is $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. what was the firm's end- of-year cash balance? recreate the firm's cash flow statement to arrive at your answer

Which of the following has the largest impact on opportunity cost