Parlor Company Manufactures Equipment That They Sell or Lease

question 68

Multiple Choice

Parlor Company manufactures equipment that they sell or lease.On December 31,2014,Parlor leased equipment to Liner Company for a five-year period after which ownership of the leased asset will be transferred to Liner.The lease calls for equal annual payments of $60,000,due on December 31 of each year.The first payment was made on December 31,2014.The normal sales price of the equipment is $320,000,and cost is $276,000.For the year ended December 31,2014,what amount of income should Parlor report from the lease transaction?

• A) $10,000
• B) $30,000
• C) $44,000
• D) $74,000

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Definitions:

Ego-syntonic

Refers to thoughts, impulses, and behaviors that are consistent with an individual's self-perception, often contrasted with ego-dystonic, which feels foreign to one's self-image.

Common Personality Disorder

Refers to a range of mental disorders characterized by deeply ingrained, inflexible patterns of thought, feeling, or behavior that deviate significantly from the expectations of culture.

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, a handbook used by healthcare professionals as the authoritative guide to diagnosing mental disorders.