information in question to leases and lease structure issues were found on the FASB website. Research was primarily focused on three lease types‚ direct financing‚ sales type‚ and operating leases. The information recovered can be used by the client in the evaluation and capitalization of the new customer. The following information listed on the FASB website should
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the provisions of Big Bear Power’s lease of Goliath Co’s combustion turbine should be included in its minimum lease payments. We have provided a summary of the facts‚ our conclusion‚ the basis for our conclusion‚ and an analysis of possible alternatives to our conclusion as requested. Summary of the Facts Big Bear Power (the Company)‚ a public utility company‚ is leasing a combustion turbine from Goliath Co. for a 10-year‚ non-cancelable term. The lease agreement was signed on December 15
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Power entered into a lease agreement with Goliath Co. for a combustion turbine. In order for Big Bear to properly account for the transaction‚ the terms and provisions of the lease agreement must be evaluated and important decisions must be made. My discussion to follow will be presented in three parts. Part one will present the evaluations that must be made by Big Bear in terms of accounting for the lease. Part two will present the lease details and provisions of the lease and the options Big
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13-4 A. Firms with lower effective tax rates were found to have a higher proportion of leased debt to total assets than did firms with higher effective tax rates. Some lease agreements are in-substance long-term installment purchases of assets that have been structured to gain tax or other benefits to the parties. Since leases may take different forms‚ it is necessary to examine the underlying nature of the original transaction to determine the appropriate method of accounting for these agreements
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Which of these are the main sources of regulations governing financial reporting in Australia? A) The Corporations Act‚ The AASB‚ CLERP B) Accounting standards‚ conceptual framework‚ stock exchange listing rules C) Government legislation‚ stock exchange listing rules‚ accounting standards D) AASB‚ FRC‚ government legislation. If there is a conflict between the provisions of the Framework and the requirements of the accounting standards A) The statements of accounting concepts prevail B) The
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Bear signed a 10-year noncancelable lease on December 15‚ 2010. The lease begins on January 1‚ 2011. There are three provisions to this lease that need to be analyzed to tell if they should be included in the minimum lease payments. For provision one‚ Big Bear pays $500‚000 to an external legal counsel to negotiate the lease agreement. This $500‚000 that Big Bear paid in connection with negotiating the lease agreement would not be included in the minimum lease payment. These legal fees would be
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ISSUE: Accounting for ABC’s tenant improvements and lease incentive obligations under the lease agreement with Landlord LLC (the “Landlord”). BRIEF BACKGROUND OF COMPANY ABC Inc. was founded in 2007 and is headquartered in San Francisco. Revenues and net income for 2010 are $500 million and $80 million‚ respectively. In September 2010‚ ABC Inc. (“ABC” or the “Company”) entered into an agreement with Landlord LLC (the “Landlord”) to lease approximately 268‚000 square feet or 40% of a building
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1. What type of asset(s) does Pepsi lease with its operating leases? Non-cancelable operating leases primarily represent building lease. 2. How much does PepsiCo. owe related to its operating leases? Operating leases are $1‚825 3. Where is the amount owed for operating leases shown on the balance sheet? Cannot find. 4. One area of significant difference between U.S. GAAP and IFRS is accounting for leases. Deliberations between the standards
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Seeing as we take part in many different forms of contracts on a daily basis‚ they are a big part of our lives; whether it is clicking the “I Accept” button on some software we just downloaded‚ or signing a 10+ page lease agreement. We make many promises and commitments and it is important to know about the promises we are making on a daily basis. Last year I moved into my first apartment. I had never lived anywhere but with my parents and I was moving in with a friend of mine. We took our time
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to be $300‚000. Alternatively‚ the company can lease the equipment from Hendrix Leasing. The lease contract calls for four annual payments of $650‚000‚ due at the beginning of the year. Additionally‚ Warf Computers must make a security deposit of $150‚000 that will be returned when the lease expires. Warf Computers can issue bonds with a yield of 11 percent‚ and the company has a marginal tax rate of 35 percent. 1. Should Warf buy or lease the equipment? 2. Nick mentions to James Hendrix
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