Which of the following statements is FALSE? Select one: A. Some leases are substantially equivalent to...
Which of the following statements is FALSE? Select one:
A. Some leases are substantially equivalent to purchases.
B. The lessee will always record the liability associated with future cash payments but never an asset associated with the property being leased.
C. A lease contract creates property rights and financial obligations.
D. Almost any asset could be leased.
E. Leases can take the form of a capital lease or an operating lease.
Homework Answers
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Which of the following statements is FALSE? Select one:
A. Some leases are substantially equivalent to...
Question 21 2 pts Which of the following statements is false? 1. The lease-equivalent loan is...
Question 21 2 pts Which of the following statements is false? 1. The lease-equivalent loan is the loan that is required on the purchase of the asset that leaves the purchaser with the same obligations as the lessor would have. 2. Lease obligations themselves could trigger financial distress. 3. When a firm enters into a lease, it is committing to lease payments that are a fixed future obligation of the firm. 4. When a firm leases an asset, it is...
Analysis Case 15-4 Lease concepts; Walmart QL015–1 though 1015-4 Real World Financials Walmart Inc. is the...
Analysis Case 15-4 Lease concepts; Walmart QL015–1 though 1015-4 Real World Financials Walmart 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 following information: Balance Sheet ($ in millions) 2017 2016 $11,637 $11,096 (5,169) (4,751) Assets Property: Property under finance lease obligations Less: Accumulated amortization Liabilities Current liabilities: Finance lease obligations due within one year Long-term debt: Long-term finance lease obligations 565 551...
1. From the lessor's standpoint, which of the following statements regarding leasing is false? a. For...
1. From the lessor's standpoint, which of the following statements regarding leasing is false? a. For sales-type lease agreements, the lessor earns interest in addition to profit from the transfer of the asset. b. The asset is transferred to the lessee and removed from the books of the lessor. c. The lease provides a method of indirectly making a sale. d. The risk of default is a disadvantage for the lessor. 2. Which is an advantage of leasing from a...
2. Which of the following lease contract would be the most likely be classified as a...
2. Which of the following lease contract would be the most likely be classified as a finance lease by the lessee? a. The lease term is 7 years and economic life of the lease asset is 8 years b. The fair value of the lease asset is $20 million, and the present value of the lease payments is $13 million c. Ownership of the leased assets reverts to the lessor at the end of the lease term d. The lessee...
The chosen answers may not be correct. Please share your knowledge. Which two of the following...
The chosen answers may not be correct. Please share
your knowledge.
Which two of the following five statements are correct? Select two alternatives: Because we are getting the entire asset when we purchase it with the loan, the loan payments are higher than the lease payments. In a capital lease, the firm does not report the present value of the future lease payments as a liability on the balance sheet. SPEs are commonly used in synthetic leases, which are designed...
Goldman Sachs' 10-K report contains the following lease footnote. This is the only information it discloses...
Goldman Sachs' 10-K report contains the following lease footnote. This is the only information it discloses relating to its leasing activity. The firm has contractual obligations under long-term noncancelable lease agreements for office space expiring on various dates through 2069. Rent charged to operating expense was $249 million for 2015. The table below presents future minimum rental payments, net of minimum sublease rentals. $ in millions As of December 2015 2016 $317 2017 313 2018 301 2019 2020 2021-thereafter Total...
. Which of the following statements is CORRECT? a. One advantage of forward cont...
. Which of the following statements is CORRECT? a. One advantage of forward contracts is that they are default free. b. Futures contracts generally trade on an organized exchange and are marked to market daily. c. Goods are never delivered under forward contracts, but are almost always delivered under futures contracts. d. Forward contracts are for commodities while future contracts are for financial securities. Buying a call and a put with the same strike price is called a _______. Naked...
When the loan is first obtained, $300,000 will be posted in the long- term debt account...
When the loan is first obtained, $300,000 will be posted in
the long- term debt account and will appear on the balance sheet.
At the end of the first year, Sunnyvale will pay the bank a total
of $130,000, consisting of $30,000 interest on the loan and
$100,000 repayment on the principal portion of the loan. The
$30,000 interest expense, which is paid to the bank for the use of
its money, appears as an expense on the income statement....
Which of the following statements regarding goodwill is false? Select one: a. Goodwill is never amortized...
Which of the following statements regarding goodwill is false? Select one: a. Goodwill is never amortized for financial reporting purposes. O b. A company must review its goodwill for impairment annually O C. A company records goodwill at the time that it acquires another company or at the time it determines that material intellectual capital exists in its employees. Od. A company must review its goodwill for impairment whenever events or changes in circumstances occur that would more likely than...
Respond to the following in a minimum of 175 words PLEASE TYPE RESPONSE: Many individuals and...
Respond to the following in a minimum of 175 words PLEASE TYPE RESPONSE: Many individuals and companies choose to lease for the following advantages. Based on these can you tell me if you were a manager of a company which would you use and why? 1. Leasing reduces the upfront cash needed to use an asset. The purchase of an asset can include several additional fees—loan origination fees, closing costs, brokerage fees, and certain taxes. You know that if you’ve...
Question 21 2 pts Which of the following statements is false? 1. The lease-equivalent loan is the loan that is required on the purchase of the asset that leaves the purchaser with the same obligations as the lessor would have. 2. Lease obligations themselves could trigger financial distress. 3. When a firm enters into a lease, it is committing to lease payments that are a fixed future obligation of the firm. 4. When a firm leases an asset, it is...
Analysis Case 15-4 Lease concepts; Walmart QL015–1 though 1015-4 Real World Financials Walmart 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 following information: Balance Sheet ($ in millions) 2017 2016 $11,637 $11,096 (5,169) (4,751) Assets Property: Property under finance lease obligations Less: Accumulated amortization Liabilities Current liabilities: Finance lease obligations due within one year Long-term debt: Long-term finance lease obligations 565 551...
2. Which of the following lease contract would be the most likely be classified as a finance lease by the lessee? a. The lease term is 7 years and economic life of the lease asset is 8 years b. The fair value of the lease asset is $20 million, and the present value of the lease payments is $13 million c. Ownership of the leased assets reverts to the lessor at the end of the lease term d. The lessee...
The chosen answers may not be correct. Please share
your knowledge.
Which two of the following five statements are correct? Select two alternatives: Because we are getting the entire asset when we purchase it with the loan, the loan payments are higher than the lease payments. In a capital lease, the firm does not report the present value of the future lease payments as a liability on the balance sheet. SPEs are commonly used in synthetic leases, which are designed...
Goldman Sachs' 10-K report contains the following lease footnote. This is the only information it discloses relating to its leasing activity. The firm has contractual obligations under long-term noncancelable lease agreements for office space expiring on various dates through 2069. Rent charged to operating expense was $249 million for 2015. The table below presents future minimum rental payments, net of minimum sublease rentals. $ in millions As of December 2015 2016 $317 2017 313 2018 301 2019 2020 2021-thereafter Total...
When the loan is first obtained, $300,000 will be posted in
the long- term debt account and will appear on the balance sheet.
At the end of the first year, Sunnyvale will pay the bank a total
of $130,000, consisting of $30,000 interest on the loan and
$100,000 repayment on the principal portion of the loan. The
$30,000 interest expense, which is paid to the bank for the use of
its money, appears as an expense on the income statement....
Which of the following statements regarding goodwill is false? Select one: a. Goodwill is never amortized for financial reporting purposes. O b. A company must review its goodwill for impairment annually O C. A company records goodwill at the time that it acquires another company or at the time it determines that material intellectual capital exists in its employees. Od. A company must review its goodwill for impairment whenever events or changes in circumstances occur that would more likely than...
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