On May 1, 2020, Charles Corp

question 108

Multiple Choice

On May 1, 2020, Charles Corp. leased equipment to Darwin Inc. for one year under an operating lease. Instead of leasing it, Darwin could have bought the equipment from Charles for $ 800,000 cash. At this time, Charles's accounting records showed a book value for the equipment of $ 700,000. Depreciation on the equipment in 2020 was $ 90,000. During 2020, Darwin paid $ 22,500 per month rent to Charles for the 8-month period, and Charles incurred maintenance and other related costs under the terms of the lease of $ 16,000. The net income before income taxes reported by Charles from this lease for the year ended December 31, 2020, should be

• A) $ 74,000.
• B) $ 90,000.
• C) $ 164,000.
• D) $ 180,000.

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Definitions:

Taste and Smell

The sensory experiences related to the perception of flavors (taste) and odors (smell), both crucial for enjoyment and detection of food and environmental substances.

Food Poisoning

Illness caused by consuming food contaminated with harmful bacteria, viruses, parasites, or toxins, leading to symptoms like nausea, vomiting, diarrhea, and abdominal pain.

Sensitivity

Sensitivity refers to the capacity of individuals to perceive and respond to the emotions and needs of others or to be aware of the subtleties in their environment.

Handedness

The preference of using one hand over the other.