RE: Trucking lease options This memo is intended to inform you on leasing information in the Financial Accounting Research System (FARS) and create a recommendation for the regional trucking company as it pertains to their leasing options. This memo will briefly cover sales-type‚ direct financing‚ and operating leases for your information. If a lease does not meet the criteria for capitalization then it will be classified as an operating lease by the lessee. A capital lease transfers most
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On January 1‚ 2006‚ 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 lease term. The term of the lease is eight years. The minimum lease payment made by Lani on January 1‚ 2006‚ was one of eight equal annual payments. At the inception of the lease‚ the criteria established for classification as a capital lease by the lessee were met. Required: a.) What is the theoretical
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Case Study Report Accounting (Decision Analysis) 308 [pic] Lecture: Adrian Melia Tutor: Rajni Mala Tutorial Time: 9am-11am (Wednesday class) DUE DATE: 12/09/08 table of Content Executive Summary 3 Executive Summary 4 Introduction 5 Introduction 6 SWOT ANALYSIS 7 SWOT Analysis 8 Common-size analysis 10 Balance sheet and common size analysis from2005-2008 11 Common-size analysis 23 Accounting Analysis 25 EVAL Ratio Analysis 35 Appendix: Financial Statements of
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require a lessee to classify a lease of equipment as a capital lease? a. b. c. d. ____ of the following are typically recognized as accounting liabilities e xcept: Notes Payable Warranties Payable Purchase Commitments Subscription Fees Received in Advance There is no transfer of ownership to the lessee at the end of the lease term. The lease does not contain a bargain purchase option. The lease term is 90% of the estimated economic life of the lease property. The present value
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24—Investments‚ Leases‚ and Full Disclosure Multiple-choice 1. The lessor capitalizes and amortizes initial direct costs for all types of leases except: a. direct-financing leases. b. operating leases. c. there are no exceptions. d. sales-type leases. 2. Johnson‚ Inc.‚ leased an asset to Raymond Corporation. The cost of the asset to Johnson was $8‚000. Terms of the lease specify four-year life for the lease‚ an annual interest rate of 15 percent‚ and four year-end rental payments. The lease qualifies as
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Overview Mitten Manufacturing Ltd.’s (MML) sole shareholder and owner‚ Angela Mitten‚ has made the decision to sell her ownership in the business in order to be able to retire in the near future. MML produces children’s mittens and scarves. Prospective buyer‚ John Kachurowski‚ feels that this purchase would result in synergies and economies of scale with his current company that manufactures winter jackets. If this acquisition does go through‚ it is quite likely that the share price would increase
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2010/2011 Patrice Schumesch Sebastian Harushimana Table of contents (1/4) Introduction - Why IFRS ? - General principles Measurement of assets and liabilities - Formation expenses - Intangible assets - Property‚ plant & equipment - Leases - Impairment of assets Slide 2 Consolidation and IFRS: an introduction Table of contents (2/4) Measurement of assets and liabilities (cont’d) - Government grants - Inventories and contracts in progress - Revenue recognition - Provisions
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are no net gains or losses. (b) Determine the fair value of plan assets at December 31‚ 2008. (c) Calculate pension expense for 2008. (d) Prepare the journal entry to record pension expense and the contributions for 2008. 25 points 3. Lessor accounting—sales-type lease. Piper Corp. is a manufacturer of truck trailers. On January 1‚ 2008‚ Piper Corp. leases ten trailers to Runyan Company under a six-year noncancelable lease agreement. The following information about the lease and the
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Equipment | | | 14 | | | | | | | Questions & Answers | | | 16 | | | | | | | Conclusion | | | 19 | | | | | | | Appendices : | | | 20 | | | | | | 1 | Further Information on Lease | | | i | 2 | Further Information on Research & Development Costs | | | ii | 3 | Further Information on Basket Purchase | | | iii | 4 | Copy of Original Case Question | | | iv | 5 | Copy of Oral Presentation Handouts |
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Question 1 XYZ Corporation is analyzing the possible acquisition of Stake Technology Inc.. Both firms have no debt. XYZ Corporation believes the acquisition will increase its total after-tax annual cash flows by $0.33 million indefinitely. The current market value of Stake Technology Inc. is $10.80 million‚ and that of XYZ Corporation is $14.20 million. The appropriate discount rate for the incremental cash flows is 11 percent. XYZ Corporation is trying to decide whether it should offer 42 percent
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