All Related Questions of Capital Lease

Q: Describe the effect of a “bargain-purchase option” on

Describe the effect of a “bargain-purchase option” on accounting for a capital lease transaction by a lessee.

Q: The following facts pertain to a noncancelable lease agreement between Alschuler Leasing

The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. The collectibility of the lease payments is rea...

Q: Assume the same information as in P21-4. In

Assume the same information as in P21-4. In P21-4 The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred...

Q: Outline the accounting procedures involved in applying the capital lease method by

Outline the accounting procedures involved in applying the capital lease method by a lessee.

Q: Shapiro Inc. was incorporated in 2013 to operate as a computer

Shapiro Inc. was incorporated in 2013 to operate as a computer software service firm with an accounting fiscal year ending August 31. Shapiro’s primary product is a sophisticated onl...

Q: Part 1: Capital leases and operating leases are the two classifications

Part 1: Capital leases and operating leases are the two classifications of leases described in FASB pronouncements from the standpoint of the lessee. Instructions (a) Describe how a capital lease woul...

Q: Albertsen Corporation is considering proposals for either leasing or purchasing aircraft.

Albertsen Corporation is considering proposals for either leasing or purchasing aircraft. The proposed lease agreement involves a twin-engine turboprop Viking that has a fair value of $1,000,000. This...

Q: Baden Corporation entered into a lease agreement for 10 photocopy machines for

Baden Corporation entered into a lease agreement for 10 photocopy machines for its corporate headquarters. The lease agreement qualifies as an operating lease in all terms except there is a bargain-pu...

Q: The following are Sullivan Corp.’s comparative balance sheet accounts at

The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2014 and 2013, with a column showing the increase (decrease) from 2013 to 2014. Additional infor...

Q: On January 1, 2014, Evans Company entered into a non

On January 1, 2014, Evans Company entered into a non-cancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Evans by the end of the...

Q: Following are a number of unrelated transactions for K-Town,

Following are a number of unrelated transactions for K-Town, some of which affect governmental activities at the government wide level. None of the transactions has been recorded yet. 1. The General F...

Q: The City of Jamestown has agreed to acquire a new city maintenance

The City of Jamestown has agreed to acquire a new city maintenance building under a capital lease agreement. At the inception of the lease, a payment of $100,000 is to be made; nine annual lease payme...

Q: How does one determine whether a particular lease is a capital lease

How does one determine whether a particular lease is a capital lease or an operating lease? What entries are required in the general journals of a governmental fund and governmental activities at the...

Q: Martha Millon, financial manager for Fish & Chips Inc., has

Martha Millon, financial manager for Fish & Chips Inc., has been asked to perform a lease versus- buy analysis on a new computer system. The computer costs $1,200,000; and if it is purchased, Fish & C...

Q: Ralph Lauren Corporation is a global leader in the design, marketing

Ralph Lauren Corporation is a global leader in the design, marketing, and distribution of premium lifestyle products, including men’s, women’s and childrenâ&#...

Q: The balance sheet and disclosure of significant accounting policies taken from the

The balance sheet and disclosure of significant accounting policies taken from the 2016 annual report of Wal- Mart Stores, Inc., appear below. Use this information to answer the following questions: 1...

Q: Walmart Stores, Inc. is the world’s largest retailer. A

Walmart Stores, Inc. is the world’s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure notes revealed the...

Q: Best Buy Co., Inc., headquartered in Richfield, Minnesota,

Best Buy Co., Inc., headquartered in Richfield, Minnesota, is one of the leading consumer electronics retailers, operating more than 1,000 stores in the United States, Europe, Canada, China, and Mexic...

Q: Exhibit 5.25 presents balance sheets for 2007 and 2008 for

Exhibit 5.25 presents balance sheets for 2007 and 2008 for Whole Foods Market, Inc.; Exhibit 5.26 presents income statements for 2006–2008. REQUIRED a. Prepare the standard decompo...

Q: A company recognizes a lease as a capital lease when

A company recognizes a lease as a capital lease when a. the lease transfers title of the leased asset to the lessee at the end of the lease term. b. the present value of the lease payments is less th...

Q: The postclosing trial balance for the City of Fort Collins governmental funds

The postclosing trial balance for the City of Fort Collins governmental funds at June 30, 2016, shows the following ledger account balances: ADDITIONAL INFORMATION: 1. During the year, Fort Collins...

Q: The postclosing trial balance for the Village of Alantown general fund at

The postclosing trial balance for the Village of Alantown general fund at June 30, 2016, shows the following ledger account balances: Debits Cash.........................................................

Q: The following data are available from the City of Boulder’s financial records

The following data are available from the City of Boulder’s financial records on September 30, 2016: a. The net change in fund balance—total governmental funds for the city is $1,408,950. b. The city...

Q: Using a present value table, your calculator, or a computer

Using a present value table, your calculator, or a computer program present value function, calculate the present value of a. A car down payment of $3,000 that will be required in two years, assuming...

Q: On January 1, 2010, Carey, Inc., entered into

On January 1, 2010, Carey, Inc., entered into a No cancellable lease agreement, agreeing to pay $3,500 at the end of each year for four years to acquire a new computer system having a market value of...

Q: Ambrose Co. has the option of purchasing a new delivery truck

Ambrose Co. has the option of purchasing a new delivery truck for $28,200 in cash or leasing the truck for $6,100 per year, payable at the end of each year for six years. The truck also has a useful l...

Q: Assume that Home and Office City, Inc., provided the following

Assume that Home and Office City, Inc., provided the following comparative data concerning long-term debt in the notes to its 2011 annual report (amounts in millions): Required: a. As indicated, Hom...

Q: A city is having fiscal problems in 2018. It expects to

A city is having fiscal problems in 2018. It expects to report a deficit in its general fund, the only fund that is statutorily required to be balanced. To eliminate the anticipated deficit, the city...

Q: The following schedule is based on the notes to the financial statements

The following schedule is based on the notes to the financial statements of Beth County Health District. Future minimum payments under capitalized leases and noncancellable operating leases with initi...

Q: Select the best answer. 1. A town signs

Select the best answer. 1. A town signs a 10-year capital lease by which it acquires equipment with a market value of $1 million. The lease incorporates an implicit interest rate of 8 percent per yea...

Q: On January 1, 2016, Dahlgren Corporation entered into a noncancelable

On January 1, 2016, Dahlgren Corporation entered into a noncancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Dahlgren at the en...

Q: Under SFAS No. 13, leases that do not meet one

Under SFAS No. 13, leases that do not meet one of the four criteria for a capital lease are treated as operating leases. Team Debate: Team 1: Argue for the capitalization of leases that do not meet an...

Q: Hill Corporation, a diversified manufacturing company, has offices and operating

Hill Corporation, a diversified manufacturing company, has offices and operating locations in major cities throughout the United States. The corporate headquarters for Hill Corporation is located in C...

Q: Snappy Corporation enters into a lease agreement with Long Leasing. Long

Snappy Corporation enters into a lease agreement with Long Leasing. Long requires that the lease qualify as a sale. Snappy can fill this requirement by either guaranteeing the residual value itself or...

Q: On January 1, 2017, Lani Company entered into a noncancelable

On January 1, 2017, Lani Company entered into a noncancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Lani by the end of the lea...

Q: Part 1: Capital leases and operating leases are the two classifications

Part 1: Capital leases and operating leases are the two classifications of leases described in FASB pronouncements from the standpoint of the lessee. Required: a. Describe how a capital lease would be...

Q: On January 1, 2017, Von Company entered into two noncancelable

On January 1, 2017, Von Company entered into two noncancelable leases for new machines to be used in its manufacturing operations. The first lease does not contain a bargain purchase option; the lease...

Q: Differentiate between an operating lease, a capital lease (also known

Differentiate between an operating lease, a capital lease (also known as a financial lease), and a sale and leaseback arrangement. How might investors be misled by firms that use lease financing exten...

Q: On January 1, 2010, Carey, Inc., entered into

On January 1, 2010, Carey, Inc., entered into a No cancellable lease agreement, agreeing to pay $3,500 at the end of each year for four years to acquire a new computer system having a market value of...

Q: Ambrose Co. has the option of purchasing a new delivery truck

Ambrose Co. has the option of purchasing a new delivery truck for $28,200 in cash or leasing the truck for $6,100 per year, payable at the end of each year for six years. The truck also has a useful l...

Q: Assume that Home and Office City, Inc., provided the following

Assume that Home and Office City, Inc., provided the following comparative data concerning long-term debt in the notes to its 2011 annual report (amounts in millions): Required: a. As indicated, Hom...

Q: Your conversation with Mr. Gerrard, which took place in February

Your conversation with Mr. Gerrard, which took place in February 2011 (see Case 6.28), continued as follows: Case 4.26: Gerrard Construction Co. is an excavation contractor. The following summarized...

Q: Using a present value table, your calculator, or a computer

Using a present value table, your calculator, or a computer program present value function, calculate the present value of a. A car down payment of $3,000 that will be required in two years, assuming...

Q: You should also review the solution to Case 4.26 on

You should also review the solution to Case 4.26 on the Web site for this text at www.mhhe.com/marshall9e before attempting to complete this case.) Case 4.26: Gerrard Construction Co. is an excavati...

Q: Refer to Exhibits 5-3, 5-4, and

Refer to Exhibits 5-3, 5-4, and 5-5 to answer the following questions: a. For each of the firms illustrated, what is the single largest asset category? Does this seem typical of this type of firm? b....

Q: Best Buy Co., Inc., headquartered in Richfield, Minnesota,

Best Buy Co., Inc., headquartered in Richfield, Minnesota, is one of the leading consumer electronics retailers, operating more than 1,200 stores in the United States, Canada, China, and Mexico. The f...

Q: The following facts pertain to a noncancelable lease agreement between Alschuler Leasing

The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Inception date …â...

Q: Assume the same information as in P21-4.

Assume the same information as in P21-4. In P21-4 The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer syst...

Q: Albertsen Corporation is a diversified company with nationwide interests in commercial real

Albertsen Corporation is a diversified company with nationwide interests in commercial real estate developments, banking, copper mining, and metal fabrication. The company has offices and operating lo...

Q: The following are Sullivan Corp.’s comparative balance sheet accounts at

The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2012 and 2011, with a column showing the increase (decrease) from 2011 to 2012. Additional inf...

Q: Shapiro Inc. was incorporated in 2011 to operate as a computer

Shapiro Inc. was incorporated in 2011 to operate as a computer software service firm with an accounting fiscal year ending August 31. Shapiro’s primary product is a sophisticated online inventory-cont...

Q: Presented in Illustration 21-31 are the financial statement disclosures from

Presented in Illustration 21-31 are the financial statement disclosures from the 2009 annual report of Tasty Baking Company. Instructions Answer the following questions related to these disclosures....

Q: Use the information for Rick Kleckner Corporation from BE21-3.

Use the information for Rick Kleckner Corporation from BE21-3. Assume that at December 31, 2012, Kleckner made an adjusting entry to accrue interest expense of $29,530 on the lease. Prepare Kleckner’s...

Q: Rick Kleckner Corporation recorded a capital lease at $300,000

Rick Kleckner Corporation recorded a capital lease at $300,000 on January 1, 2012. The interest rate is 12%. Kleckner Corporation made the first lease payment of $53,920 on January 1, 2012. The lease...

Q: The following excerpts are from the 2013 Form 10-K of

The following excerpts are from the 2013 Form 10-K of Facebook, Inc11. See Accompanying Notes to Consolidated Financial Statements. See Accompanying Notes to Consolidated Financial Statement...

Q: At fiscal year-end December 31, 2015, ShopWorld had

At fiscal year-end December 31, 2015, ShopWorld had the following assets and liabilities on its balance sheet (in millions): Current liabilities……â€...

Q: The following excerpts are from the 2013 Walgreen Co. Form 10

The following excerpts are from the 2013 Walgreen Co. Form 10-K: The accompanying Notes to Consolidated Financial Statements are integral parts of these statements. Notes to Consolidated Financial S...

Q: For each of the following items, indicate whether the item should

For each of the following items, indicate whether the item should be reflected in the 2013 financial statements for Tindall Company. If the item should be reflected, indicate whether it should be repo...

Q: Choose the best answer. 1. Under GASB standards,

Choose the best answer. 1. Under GASB standards, which of the following would be considered an example of an intangible asset? a. A lake located on city property. b. Water rights associated with the s...

Q: Following are a number of unrelated transactions for the Village of Centerville

Following are a number of unrelated transactions for the Village of Centerville, some of which affect governmental activities at the government-wide level. None of the transactions has been recorded y...

Q: In early 2017, McCormick County agreed to acquire a new recreation

In early 2017, McCormick County agreed to acquire a new recreation equipment storage facility under a capital lease agreement. At the inception of the lease, a payment of $750,000 will be made; four a...

Q: The following information relates to actual results from Central Town’s general fund

The following information relates to actual results from Central Town’s general fund for the year ended December 31, 20X1: • Other cash receipts include a count...

Q: The use of the capital lease method for a given lease will

The use of the capital lease method for a given lease will always result in a lower net income than the operating lease method. Do you agree? Explain fully.

Q: (a) How does a capital lease for equipment affect the

(a) How does a capital lease for equipment affect the lessee’s statement of cash flows? (b) How would the treatment on the statement of cash flows differ if the contract was identified as a purchase o...

Q: Conceptually, what is the difference between a capital lease and an

Conceptually, what is the difference between a capital lease and an operating lease?

Q: What criteria must be met before a lease can be properly accounted

What criteria must be met before a lease can be properly accounted for as a capital lease on the books of the lessee?

Q: What is the basic difference between an operating lease and a capital

What is the basic difference between an operating lease and a capital lease from the viewpoint of the lessee?

Q: Refer to Practice 15-6. Net income for the year

Refer to Practice 15-6. Net income for the year was $10,000. Except for lease-related items, there were no changes in current operating assets or liabilities during the year, no purchases or sales of...

Q: On December 31, the company, a lessee, purchased some

On December 31, the company, a lessee, purchased some machinery that it had been leasing under a capital lease arrangement. The leased asset and lease liability were originally recorded at $1,000,000....

Q: Best Buy Co., Inc.’s consolidated balance sheets from its

Best Buy Co., Inc.’s consolidated balance sheets from its 2011 annual report are presented in Exhibit 5-3. Required a. Using the balance sheets, prepare a vertical common-size analys...

Q: Best Buy Co., Inc.’s consolidated statements of earnings from

Best Buy Co., Inc.’s consolidated statements of earnings from its 2011 annual report are presented in Exhibit 5-3. Required a. Using the statement of earnings, prepare a vertical co...

Q: The complexity and uniqueness of the federal government makes it difficult to

The complexity and uniqueness of the federal government makes it difficult to conduct a meaningful analysis of its financial condition. However, conducting a financial statement analysis does provide...

Q: Refer to Google’s financial statements in Appendix A. Identify Google’s net

Refer to Google’s financial statements in Appendix A. Identify Google’s net earnings (income) for the year ended December 31, 2013. Is its net earnings equal to the...

Q: Refer to the statements for Google in Appendix A. For the

Refer to the statements for Google in Appendix A. For the year ended December 31, 2013, what is its debt-to-equity ratio? What does this ratio tell us? Google’s Financial Statements...

Q: Refer to Google’s statement of cash flows in Appendix A. What

Refer to Google’s statement of cash flows in Appendix A. What are its cash flows from financing activities for the year ended December 31, 2013? List the items and amounts. Google&a...

Q: Refer to Google’s financial statements in Appendix A. On December 31

Refer to Google’s financial statements in Appendix A. On December 31, 2013, what percent of current assets are represented by inventory? Google’s Financial Stateme...

Q: Refer to Google’s financial statements in Appendix A to compute its equity

Refer to Google’s financial statements in Appendix A to compute its equity ratio as of December 31, 2013, and December 31, 2012. Google’s Financial Statements from...

Q: Harbor (lessee) signs a five-year capital lease for

Harbor (lessee) signs a five-year capital lease for office equipment with a $10,000 annual lease payment. The present value of the five annual lease payments is $41,000, based on a 7% interest rate. 1...

Q: Rogers Company signs a five-year capital lease with Packer Company

Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $10,000, and the interest rate is 8%. Required 1. Compute the present val...

Q: Braun Company signs a five-year capital lease with Verdi Company

Braun Company signs a five-year capital lease with Verdi Company for office equipment. The annual year-end lease payment is $20,000, and the interest rate is 10%. Required 1. Compute the present valu...

Q: The Village of Parry reported the following for its Print Shop Fund

The Village of Parry reported the following for its Print Shop Fund for the year ended April 30, 2017. The Print Shop Fund records also revealed the following: The following balances were observed...

Q: Assume a government leases equipment to be used in governmental activities under

Assume a government leases equipment to be used in governmental activities under a noncancelable lease, meeting the requirements for classification as a capital lease. Where the capital lease and the...

Q: On July 1, 2016, a five-year agreement is

On July 1, 2016, a five-year agreement is signed between the City of Genoa and the Computer Leasing Corporation for the use of computer equipment not associated with proprietary funds activity. The co...

Q: The conditions determining whether a lease is classified as an operating lease

The conditions determining whether a lease is classified as an operating lease or a capital lease were prescribed in SFAS No. 13, paragraph 7. Where is this located in this Codification?

Q: Exhibits 1.26–1.28 of Integrative Case 1

Exhibits 1.26–1.28 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 2012 to 2015. In addition, the website for this text contains Walmartâ&#...

Q: Exhibits 1.26–1.28 of Integrative Case 1

Exhibits 1.26–1.28 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 2012–2015. In addition, the website for this text contains W...

Q: Exhibit 5.24 presents balance sheets for Year 2 and Year

Exhibit 5.24 presents balance sheets for Year 2 and Year 3 for Whole Foods Market, Inc.; Exhibit 5.25 presents income statements for Year 1 through Year 3. Exhibit 5.24: Exhibit 5.25: REQUIRED: a...

Q: Sentry, Inc., acquires for $2,300,000

Sentry, Inc., acquires for $2,300,000 in cash, the net assets of New Equipment Company. The acquisition is made on December 31, 2015, at which time New Equipment has prepared the following balance she...

Q: Steven Truck Company has been an 80%-owned subsidiary of Paulz

Steven Truck Company has been an 80%-owned subsidiary of Paulz Heavy Equipment since January 1, 2013, when Paulz acquired 128,000 shares of Steven common stock for $832,000, an amount equal to the boo...

Q: On January 1, 2015, Press Company acquires 90% of

On January 1, 2015, Press Company acquires 90% of the common stock of Soap Company for $324,000. On this date, Soap has total owners’ equity of $270,000, including retained earnings...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2016, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2017, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2016, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2017, Press held...

Q: Plessor Industries acquired 80% of the outstanding common stock of Slammer

Plessor Industries acquired 80% of the outstanding common stock of Slammer Company on January 1, 2015, for $320,000. On that date, Slammer’s book values approximated fair values, and...

Q: Patter Inc. acquired an 80% interest in Swing Company for

Patter Inc. acquired an 80% interest in Swing Company for $480,000 on January 1, 2011, when Swing had the following stockholders’ equity: Common stock ($10 par). . . . . . . . . . ....

Q: Tuesday Morning Corporation operates a chain of discount retail stores. The

Tuesday Morning Corporation operates a chain of discount retail stores. The company purchases closeout merchandise at prices generally ranging from 10% to 50% of the normal wholesale price and sells t...

Q: Assume that on January 1, 2017, Trans Global Airlines leases

Assume that on January 1, 2017, Trans Global Airlines leases two used Boeing 737s from Aircraft Lessors Inc. The eight-year lease calls for payments of $10,000,000 at each year-end. On January 1, 2017...

Q: On January 1, 2017, Seven Wonders Inc. signed a

On January 1, 2017, Seven Wonders Inc. signed a five-year noncancelable lease with Moss Company. The lease calls for five payments of $277,409.44 to be made at the end of each year. The leased asset h...

Q: On July 1, 2017, Burgundy Studios leases camera equipment from

On July 1, 2017, Burgundy Studios leases camera equipment from Corningstone Corporation. The lease covers eight years and requires lease payments of $42,000, beginning on July 1, 2017. The unguarantee...

Q: Delta Air Lines provides scheduled air transportation for passengers and cargo throughout

Delta Air Lines provides scheduled air transportation for passengers and cargo throughout the United States and globally a fleet of more than 900 aircraft. Information from its 2015 annual report foll...

Q: Walgreens Boots Alliance, Inc. is a global pharmacy-led

Walgreens Boots Alliance, Inc. is a global pharmacy-led health and well-being enterprise. It has 13,100 stores in 11 countries. Walgreens Boots Alliance was incorporated in 2014 and is the successor t...

Q: On January 1, 2017, Babson, Inc., leased two

On January 1, 2017, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of $13,000, beginning January 1, 2017. At the end of the lease term o...

Q: Mickelson reports on a calendar year basis. On January 1,

Mickelson reports on a calendar year basis. On January 1, 2017, Mickelson Corporation enters into a three-year lease with annual payments of $30,000. The first payment will be due on December 31, 2017...

Q: Sandra Company and Nova Inc. each signed lease agreements on January

Sandra Company and Nova Inc. each signed lease agreements on January 1, 2017. Nova’s lease qualified for capital lease treatment, but Sandra’s lease did not. All ot...

Q: On January 1, 2017, Draper Inc. signed a five

On January 1, 2017, Draper Inc. signed a five-year noncancelable lease with Thornhill Company for custom-made equipment. The lease calls for five payments of $161,364.70 to be made at the beginning of...

Q: On December 31, 2017, Ball Company leased a machine from

On December 31, 2017, Ball Company leased a machine from Cook for a 10-year period, expiring December 30, 2027. Annual payments of $100,000 are due on December 31. The first payment was made on Decemb...

Q: Target Corporation operates in a single business segment that is designed to

Target Corporation operates in a single business segment that is designed to enable guests to purchase products seamlessly in stores, online or through mobile devices. Most of its operations are in th...

Q: The income statement for the year ended December 31, 2017,

The income statement for the year ended December 31, 2017, as well as the balance sheets as of December 31, 2017, and December 31, 2016, for Lucky Lady Inc. follow. This information is taken from the...

Q: Presented next are the balance sheet accounts of Bergen Corporation as of

Presented next are the balance sheet accounts of Bergen Corporation as of December 31, 2017 and 2016. Additional Information: On January 2, 2017, Bergen sold all of its marketable investment securi...

Q: Omega Corporation’s comparative balance sheet accounts worksheet at December 31, 2017

Omega Corporation’s comparative balance sheet accounts worksheet at December 31, 2017 and 2016, follow, together with a column showing the increase (decrease) from 2016 to 2017. A...

Q: Refer to the salesforce.com financial statement excerpts given below to

Refer to the salesforce.com financial statement excerpts given below to answer the questions. On January 31, 2015, the price of salesforce.com stock was $56.45, and there were 650,596,000 shares of co...

Q: Hopper Corporation signed a ten-year capital lease or finance lease

Hopper Corporation signed a ten-year capital lease or finance lease on January 1, 2017. The lease requires annual payments of $8,000 every December 31. Required: 1. Assuming an interest rate of 10%,...

Q: Benjamin’s Warehouse signed a six-year capital lease or finance lease

Benjamin’s Warehouse signed a six-year capital lease or finance lease on January 1, 2017, with payments due every December 31. Interest is calculated annually at 10%, and the present value of the mini...

Q: Koffman and Sons signed a four-year lease for a forklift

Koffman and Sons signed a four-year lease for a forklift on January 1, 2017. Annual lease payments of $1,510, based on an interest rate of 8%, are to be made every December 31, beginning with December...

Q: Following is the current assets and current liabilities portion of the balance

Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain for the years ended September 26, 2015 and September 27, 2014: Required: Determine the...

Q: The following footnote was disclosed at the beginning of 2016 (January

The following footnote was disclosed at the beginning of 2016 (January 1, 2016). The capital lease began on January 1, 2015 when the fair value of the capital lease was $21,776 (with a six-year life...

Q: IBM manufactures a particular computer for $6,000 and sells

IBM manufactures a particular computer for $6,000 and sells it for $10,000. Adair Corporation needs this computer in its operations and contemplates three ways of acquiring it on January 1, 2013. The...

Q: Carom Sports Collectibles Shop plans to acquire, as of January 1

Carom Sports Collectibles Shop plans to acquire, as of January 1, 2013, a computerized cash register system that costs $100,000 and has a five-year life and no salvage value. The company considers two...

Q: Excerpts from the notes to the financial statements of Northern Airlines for

Excerpts from the notes to the financial statements of Northern Airlines for two recent years reveal the following (amounts in millions). Northern Airlines uses the current/old rules of accounting for...

Q: In what ways is a lessee’s capital lease similar to, and

In what ways is a lessee’s capital lease similar to, and different from, purchasing the equipment using the proceeds of a loan repayable in installments?

Q: If permitted, a lessee generally prefers to account for leases using

If permitted, a lessee generally prefers to account for leases using the operating lease method for financial reporting and the capital lease method for tax reporting.” Explain.

Q: If permitted, a lessor generally prefers to account for leases using

If permitted, a lessor generally prefers to account for leases using the capital lease method for financial reporting and the operating lease method for tax reporting.” Explain.

Q: Boeing manufactures a jet aircraft at a cost of $50 million

Boeing manufactures a jet aircraft at a cost of $50 million. The usual selling price for this aircraft is $60 million, and its typical useful life is 25 years. United Airlines desires to lease this ai...

Q: Sun Microsystems manufactures an engineering workstation for $7,200 and

Sun Microsystems manufactures an engineering workstation for $7,200 and sells it for $12,000. Although the workstation has a physical life of approximately 10 years, rapid technological change limits...

Q: On January 1, 2013, Baldwin Products, as lessee,

On January 1, 2013, Baldwin Products, as lessee, leases a machine used in its operations. The annual lease payment of $10,000 is due on December 31 of 2013, 2014, and 2015. The machine reverts to the...

Q: On January 1, 2017, Evans Company entered into a noncancelable

On January 1, 2017, Evans Company entered into a noncancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Evans by the end of the l...

Q: Albertsen Corporation is considering proposals for either leasing or purchasing aircraft.

Albertsen Corporation is considering proposals for either leasing or purchasing aircraft. The proposed lease agreement involves a twin-engine turboprop Viking that has a fair value of $1,000,000. This...

Q: The following are Sullivan Corp.’s comparative balance sheet accounts at

The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. Additional i...

Q: Shapiro Inc. was incorporated in 2016 to operate as a computer

Shapiro Inc. was incorporated in 2016 to operate as a computer software service firm with an accounting fiscal year ending August 31. Shapiro’s primary product is a sophisticated online inventory-cont...

Q: Rick Kleckner Corporation recorded a capital lease at $300,000

Rick Kleckner Corporation recorded a capital lease at $300,000 on January 1, 2017. The interest rate is 12%. Kleckner Corporation made the first lease payment of $53,920 on January 1, 2017. The lease...

Q: Use the information for Rick Kleckner Corporation from BE21-3.

Use the information for Rick Kleckner Corporation from BE21-3. Assume that at December 31, 2017, Kleckner made an adjusting entry to accrue interest expense of $29,530 on the lease. Prepare Kleckner’s...

Q: This simulation, also available online, presents an Analytical Procedures/

This simulation, also available online, presents an Analytical Procedures/Risk Assessment Analysis document prepared by two members of your audit team—your responsibility is to evalu...

Q: This simulation, available online, presents an audit request list document

This simulation, available online, presents an audit request list document for materials requested of management that has been prepared by an audit team staff member for the Keystone audit. Because th...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com Inc.’s financial statements are presented in Appendix

Amazon.com Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon a...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports for Amazon...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: 1. Human Genome Sciences, Inc., a biopharmaceutical company,

1. Human Genome Sciences, Inc., a biopharmaceutical company, discovers, develops, and markets new gene and protein-based drugs. Its 1998 annual report showed property, plant, and equipment net of accu...

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Use Figure 15-9 to describe potential differences between leasing a piece of equipment with a capital lease and purchasing the equipment using a bank loan. Figure 15-9:

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What was the change in Global Conglomerate’s book value of equity from 2014 to 2015 according to Table 2.1? Does this imply that the market price of Global’s shares...

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Acme Distribution currently has the following items on its balance sheet: Under current FASB accounting standards (that is, prior to 2019), how will Acme’s balance sheet change if...

Q: Your firm is considering leasing a $50,000 copier.

Your firm is considering leasing a $50,000 copier. The copier has an estimated economic life of eight years. Suppose the appropriate discount rate is 9% APR with monthly compounding. Classify each lea...

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Q: Assume the same information as in P20-9.

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On January 1, 2017, Clark Inc. sold a piece of equipment to Daye Ltd. for $200,000, and immediately leased the equipment back. At the time, the equipment was carried on Clark’s books at a cost of $300...

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Wong Textiles Ltd. entered into a capital lease obligation during 2017 to acquire a cutting machine. The amount recorded to the Equipment under Lease account and the corresponding Obligations under Le...

Q: Sporon Corp. is a fast-growing Canadian private company involved

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Q: On September 1, 2017, Wong Corporation, which uses ASPE

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Assume the same information as in P20.9. Instructions Follow the instructions assuming that McKee Electronics follows IFRS 16. From P20.9: The following facts pertain to a non-cancellable lease ag...

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Q: The following facts pertain to a non-cancellable lease agreement between

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Q: On January 1, 2020, Clark Inc. sold a piece

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Q: Merrill Corporation, which uses ASPE, enters into a six-

Merrill Corporation, which uses ASPE, enters into a six-year lease of equipment on September 1, 2020, that requires six annual payments of $28,000 each, beginning September 1, 2020. In addition, Merri...

Q: Sporon Corp. is a fast-growing Canadian private company involved

Sporon Corp. is a fast-growing Canadian private company involved in the manufacture, distribution, and retail of specially designed yoga and leisure wear. Sporon has recently signed 10 leases for new...

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Q: United Continental Holdings, Inc., did not adopt the new lease

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Can a government sell assets to itself to generate revenue? A city is having fiscal problems in 20Xl. It expects to report a deficit in its general fund, the only fund that is statutorily required to...

Q: Refer to Case 4.32 for the financial statement data needed

Refer to Case 4.32 for the financial statement data needed for the analysis of this case. You should also review the solution to Case 4.32, provided by your instructor, before attempting to complete t...