7 At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT

Question

7 At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a eight-year operating lease agreement The contract calls for quarterly rent payments of $44,000 each. The office building was acquired by Lakeside at a cost of $3.9 million and was expected to have a useful life of 30 years with no residual value. 0.62 points What will be the effect of the lease on Lakeside's earnings for the first year (ignore taxes)? (Enter your answer in whole dollars.) 02:52:04 akeside increases its earnings eBook Print References

Explanation / Answer

Annual rent received = 44000*4= $176000 Annual depreciation expense = 3900000/30= $130000 Increase in earnings = 176000-130000 = $46000 Lakeside increaes its earnings by $46000

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