Questions from Financial Reporting

Q: On January 1, 20X1, Walker, Inc., signs a

On January 1, 20X1, Walker, Inc., signs a 5-year lease for two floors of a 20-floor building. The building has an expected remaining life of 20 years. The space is available immediately, and Walker ag...

Q: In its long-term liabilities section of its balance sheet at

In its long-term liabilities section of its balance sheet at December 31, 20X1, Columbo Company reports a long-term operating lease liability of $82,004, net of the current portion of $13,327. Columbo...

Q: East Company leased a new machine from North Company on May 1

East Company leased a new machine from North Company on May 1, 20X1, under a leasewith the following information: East has the option to purchase the machine on May 1, 20Y1, by paying $50,000, whichap...

Q: McDonald’s Corporation franchises and operates more than 36,000 fast-

McDonald’s Corporation franchises and operates more than 36,000 fast-service restaurants around the world. Buffalo Wild Wings franchises and operates more than 1,000 restaurants in N...

Q: On December 31, 20X1, Ball Company leased a machine from

On December 31, 20X1, Ball Company leased a machine from Cook for a 10-year period, expiring December 30, 20Y1. Annual payments of $100,000 are due on December 31. The first payment was made on Decemb...

Q: On January 1, 20X1, Beard Company purchased a machine for

On January 1, 20X1, Beard Company purchased a machine for $620,000. The machine isexpected to have a 10-year life, with no salvage value, and will be depreciated by the straight line method. On Januar...

Q: Benedict Company leased equipment to Mark Inc. on January 1,

Benedict Company leased equipment to Mark Inc. on January 1, 20X1. The lease is for aneight-year period, expiring December 31, 20X8. The first of eight equal annual payments of $600,000 was made on Ja...

Q: Refer to the facts in E13-8. Required

Refer to the facts in E13-8. Required: Based on the relation between the lease life and economic life, the lessees will classify theleases as finance leases. For each lease, compute the lessee’s amor...

Q: On December 31, 20X1, Day Company leased a new machine

On December 31, 20X1, Day Company leased a new machine from Parr with the followingpertinent information: The lease is not renewable, and the machine reverts to Parr at the termination of the lease. T...

Q: On October 1, 20X1, Vaughn, Inc., leased a

On October 1, 20X1, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual payments of $10,000 beginning September 30, 20X2. Vaughn’sincremental borrow...