Use the Following Information for Questions

question 30

Multiple Choice

Use the following information for questions.
Hull Co.leased equipment to Riggs Company on May 1, 2011.The lease expires on May 1, 2012.Riggs could have bought the equipment from Hull for $3,200,000 instead of leasing it.Hull's accounting records showed a book value for the equipment on May 1, 2011, of $2,800,000.Hull's depreciation on the equipment in 2011 was $360,000.During 2011, Riggs paid $720,000 in rentals to Hull for the 8-month period.Hull incurred maintenance and other related costs under the terms of the lease of $64,000 in 2011.After the lease with Riggs expires, Hull will lease the equipment to another company for two years.
-The income before income taxes derived by Hull from this lease for the year ended December 31, 2011, should be

• A)$296,000.
• B)$360,000.
• C)$656,000.
• D)$720,000.

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Handle Stress

Techniques and strategies used to manage and reduce stress in one’s life.

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A division of the autonomic nervous system that conserves energy by slowing the heart rate and increasing intestinal and glandular activity.

Passive-Aggressive Behavior

A pattern of indirectly expressing negative feelings instead of openly addressing them.

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