Questions from Financial Reporting

Q: On October 1, 2017, Vaughn, Inc., leased a

On October 1, 2017, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual payments of $10,000 beginning September 30, 2018. Vaughn’s incremental borro...

Q: On January 1, 2017, Babson, Inc., leased two

On January 1, 2017, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of $13,000, beginning January 1, 2017. At the end of the lease term o...

Q: At December 31, 2015, ExxonMobil had 4,156 million

At December 31, 2015, ExxonMobil had 4,156 million shares of outstanding common stock. The closing market price of each share of stock at December 31, 2015, was $77.95. Presented below are excerpts fr...

Q: On December 31, 2017, Roe Company leased a machine from

On December 31, 2017, Roe Company leased a machine from Colt for a five-year period. Equal annual payments under the lease are $105,000 (including $5,000 annual executory costs for servicing) and are...

Q: On December 31, 2017, Lane, Inc., sold equipment

On December 31, 2017, Lane, Inc., sold equipment to Nolte and simultaneously leased it back for 12 years. Pertinent information at this date is as follows: Sales price ……………………………… $480,000 Carrying...

Q: Mickelson reports on a calendar year basis. On January 1,

Mickelson reports on a calendar year basis. On January 1, 2017, Mickelson Corporation enters into a three-year lease with annual payments of $30,000. The first payment will be due on December 31, 2017...

Q: Sandra Company and Nova Inc. each signed lease agreements on January

Sandra Company and Nova Inc. each signed lease agreements on January 1, 2017. Nova’s lease qualified for capital lease treatment, but Sandra’s lease did not. All ot...

Q: On January 1, 2017, Draper Inc. signed a five

On January 1, 2017, Draper Inc. signed a five-year noncancelable lease with Thornhill Company for custom-made equipment. The lease calls for five payments of $161,364.70 to be made at the beginning of...

Q: On January 1, 2017, Walker, Inc., signs a

On January 1, 2017, Walker, Inc., signs a 5-year lease for two floors of a 20-floor building. The building has an expected remaining life of 20 years. The space is available immediately, and Walker ag...

Q: On January 1, 2017, Bonduris Company leases warehouse space in

On January 1, 2017, Bonduris Company leases warehouse space in Oakland, CA. The lease is for six years with payments to be made at the beginning of each year. The lease calls for Bonduris to pay $15,0...