When the amount goes over the fair value of the lease the amount should be documented as an asset. c. What expenses related to this lease will Lani incur during the first year of the lease, and how will they be determined? Lani will obtain interest which will equal the amount used benefits the lease which is multiplied by the liability. She will receive fees associated with the depreciation of the cost of capital towards the cost of assets. d. How should Lani report the lease transaction on its December 31, 2006, balance sheet?
What does the $2.55 billion increase in Berkshire Hathaway’s market value represent? 2. Choice of valuation methods: What do you think PacifiCorp is worth on its own before its acquisition by Berkshire? Which valuation method should you use to value PacifiCorp and why? Show clearly the steps to arrive at the following estimates in Exhibit 10: Enterprise Value as Multiple of: Revenue EBIT EBITDA Net Income 6,252 8,775 9,023 7,596 6,584 9,289 9,076 7,553 MV Equity as Multiple of: EPS Book Value 4,277 5,904 4,308 5,678 Median Mean If you need to use a discount rate to discount cash flows then an appropriate discount rate estimate for PacifiCorp is approximately 9%.
NeedsSpace should clarify with WeHaveIt about the statement “general repairs and maintenance” and what is specifically makes NeedsSpace liable for. If the lease required NeedsSpace to make deposits and set up a “repair and maintenance reserve,” the deposits would be recognized as an asset and reimbursed at the conclusion of the lease, less any repair and maintenance costs (ASC 840-10-5-9a to 9c). Since the lease does not explicitly require NeedsSpace to make maintenance deposits, NeedsSpace should expense any repairs as they are performed so the money is sitting in their bank account, not WeHaveIts account. Also, it should be noted that “the accrual method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods” (ASC 360-10-25-5). Therefore, NeedsSpace would not be able to set up an account that allows them to account for future
The categorization of every lease will not depend on whether a company, bank or person to have legal ownership of the asset, it would depend only if the third party considerably has all the risk and rewards of the ownership. Operating lease payments are made on a straight line basis. Changes in the lease classification will change the will affect the debt equity. When determining whether a lease is operating or a finance lease there need to be increased judgment because there are no strict classification requirements. Lessees are obligated to recognized assets and liabilities for all leases which would eliminate the operating lease accounting.
Prepaid insurance a 19. Bonds payable g 20. Income tax payable f E5-4 (Preparation of a Classified Balance Sheet) Assume that Gulistan Inc. has the following accounts at the end of the current year. Common Stock. Discount on Bonds Payable.
Traditionally under U. S. GAAP, businesses distinguished between operating and capital/finance leases. If a lease agreement met one or more of a classification criterion it would be considered a capital lease. The criterion includes, a title transfer, a bargain purchase option, a lease term of 75% or more of expected life, and present value of the minimum payments greater than or equal to 90% of the future value of the asset. However, the proposed IFRS standards eliminate operating leases. “Under the proposed model, all leases are essentially treated the same for lessees and in a manner more akin to the traditional capital/finance lease mode” (Deloitte, 2011).
Bond value= C*[1-1(1+r)^t]/r + F/(1+r)^t = 70*[1-1(1+0.09)^8]/0.09 + 1000/(1+0.09)^8 = 889.30 Problem # 13 Using Treasury quotes: locate the treasury issue in figure 6.3 maturing in June 2023. Is this note or a bond? What is coupon rate? What is its bid price? What was the previous day’s asked price?
12.55% b. 57.35% c. 12.00% d. Other 4. If $1,000 is invested at the beginning of the year at an annual rate of 48%, compounded quarterly, what would that investment be worth at the end of the year? a. $1,574 b.
Question 2 of 100 (2B5-LS53) Flag for Review A manufacturer with seasonal sales would be most likely to obtain which one of the following types of loans from a commercial bank to finance the need for a fixed amount of additional capital during the busy season? *Source: Retired ICMA CMA Exam Questions Insurance company term loan. Transaction loan. Unsecured short-term term loan. Installment loan.