The junior accountant interpreted the lease as an operating lease based on the fact that the equipment reverts to the lessor at the end of the lease. However, in this case, all risks and rewards of ownership are substantially transferred to the lessee. 2. IAS 17-paragraph 10 states that classifying a finance lease depends on the substance of the transaction rather than the form of the contract by meeting individually or in combination situations (a) through (e). Of these situations, two have been met: (c) the lease term is for the major part of the economic life of the asset even if title is not transferred and (d) at the lease inception, the present value of the minimum lease payments amount to at least substantially all of the fair value of the leased asset.
__F__ 5. Once cost is established for a plant asset, it becomes the basis of accounting for the asset unless the asset appreciates in value, in which case, market value becomes the basis for accountability. _F___ 6. Under an operating lease, both the leased asset and the liability are shown on the balance sheet. __T__ 7.
Article 2 of the UGG says, “in a destination contract the seller bears the risk of loss of the goods during their transportation; the risk of loss does not pass until the goods are tendered to the buyers at the specified destination”. (p g 252) The claim of Wycombe which is silver has power over the furniture at the time of the fire, it is not expectable because they never transfer the furniture and company are responsible until they deliver. Also, Wycombe claim that it had ended the deal with Silver and Wycombe by making the furniture available for delivery, but I think that is not mean if the furniture destroys are not their responsible. Additionally, they may give writing letter to silver that saying Wycombe is not responsible any lose after you purchase the furniture. If they say that then they will not responsible any lose but they didn’t say that so they may be responsible and give silver’s money back.
An owner of a condominium has the right to: (Points : 2) Landscape common grounds Remodel the condominium Paint the common hallways Refuse to pay for condominium maintenance 5. Legal actions in which a mortgagee terminates a mortgagor's interest in mortgaged premises is: (Points : 2) Right of survivorship Foreclosure Eminent domain Licensing agreement 6. The Fair Housing Act is a U.S. law that regulates: (Points : 2) Grantors Mortgage companies kucourses.com/re/DotNextLaunch.asp?courseid=7026057&userid=12544991&sessionid=a44b980478… 1/2 9/25/12 PA106: Legal Terminology and Transcription Condominiums All of the above 7. The most complete estate in land is called: (Points : 2) Life estate Joint tenancy with right of survivorship Quitclaim deed Fee simple 8. A landlord of leased property may be sued by the tenants under the principles of: (Points : 2) Reversion Warranty deed Warranty of habitability Possibility of remainder 9.
CCompany Financial Analysis In doing the company financials a couple of key things become apparent. One of the biggest factors in the financials is the consistency in Costco’s growth over the past four years. The four profit margins (Total Revenues, operating income, net profit margin, and Diluted net income per share) have for the most part been rising for the last four years. Costco may look like it’s not growing but having these constant margins along with the growth in revenues means that the profit (bottom line) for Costco is increasing. Costco is doing great job in making sure that revenues constantly grow as shown below while maintaining a proportional amount of expenses to keep the profits the same or a little high from the previous year.
If the required rate of return on the stock is 20%, what is the current value of the stock today? A) $30 B) $50 C) $100 D) $54 E) None of the above Answer: B Response: P = (6/(0.2-0.08) = 50 5. WorldTour Co. has just now paid a dividend of $6 per share (Do), the dividends are expected to grow at a constant rate of 5% per year forever. If the required rate of return on the stock is 15%, what is the current value on stock (after paying the dividend)? A) $63 B) $56 C) $40 D) $48 E) None of the above Answer: A Response: P = (6*1.05)/(0.15 0.05) = 63 6.
ANALYSIS: The leasing arrangement is considered a sale-leaseback transaction because “it involve[s] the sale of property by the owner and the lease of the property back to the seller (FAS 28, 1976, ¶2). The lease agreement is classified as an operating lease because it does involve a transfer of ownership, a bargain purchase option, a term of greater than 75% of the turbine’s useful life, or minimum lease payments that exceed 90% of the equipment’s fair value (1976, ¶7). Power Station would simply record a credit to cash and a debit to lease expense for the payment amount each of the 5 years in the lease term. Power Station’s may benefit from entering into the sale-leaseback transaction because the turbines would
If the lease were to be capitalized, what should be the depreciation life? 3. Suppose that Wallace Company had structured the lease to: 1) require an appraisal of the property value at the end of the lease term and 2) allow LeMay Company to purchase the land and building at a price equal to the appraised value. How, if at all, would this change your answer to questions 1 and 2? Explain Problem 2: Sale-Leaseback Sangamon signs a sale-leaseback with a buyer, Bismark.
Examples of these would include items that take some time to manufacture but that are sold as standard items such as residential housing, subway cars, aircraft, etc… (IAS 23.4). Borrowing costs are defined as interest on short-term and long-term debt and includes any amortization of discounts and premiums and finance charges on leases. The capitalization rate is defined as the annual borrowing costs divided by the weighted average debt that generated borrowing costs. The capitalization rate is applied to the weighted average expenditures made on qualifying assets. The resulting amount is the amount of