Questions from Financial Reporting

Q: Assume that on January 1, 2017, Trans Global Airlines leases

Assume that on January 1, 2017, Trans Global Airlines leases two used Boeing 737s from Aircraft Lessors Inc. The eight-year lease calls for payments of $10,000,000 at each year-end. On January 1, 2017...

Q: On January 1, 2017, Overseas Leasing Inc. (the

On January 1, 2017, Overseas Leasing Inc. (the lessor) purchased five used oil tankers from Seven Seas Shipping Company at a price of $99,817,750. Overseas immediately leased the oil tankers to Pacifi...

Q: As a loan officer for First Bank, you’re evaluating Newton Co

As a loan officer for First Bank, you’re evaluating Newton Co.’s financial statements. Your evaluation reveals that Newton has no capital leases recorded on its fin...

Q: On January 1, 2017, Merchant Co. sold a tractor

On January 1, 2017, Merchant Co. sold a tractor to Swanson Inc. and simultaneously leased it back for five years. The tractor’s fair value is $250,000, but its carrying value on Merchant’s books prior...

Q: This problem is designed to allow you to see how different lease

This problem is designed to allow you to see how different lease durations and interest rates affect the relationship between the capitalized lease asset and lease liability. Of course, these same ass...

Q: On January 1, 2017, Dwyer Company leases space for a

On January 1, 2017, Dwyer Company leases space for a donut shop. The lease is for five years with payments to be made at the beginning of each year. The lease calls for Dwyer to pay $10,000 on January...

Q: The cereal division of Kellogg Company intends to test market next year

The cereal division of Kellogg Company intends to test market next year an organic corn based cereal to be called NutriFlakesTR. The business plan calls for production to begin in late May 2015, with...

Q: In its 2012 Annual Report, Singapore Airlines, which primarily complies

In its 2012 Annual Report, Singapore Airlines, which primarily complies with IFRS, reported the following expected future minimum lease payments (in $ million). In its 2012 Annual Report filed under...

Q: Lessor Company has a machine with a cost and fair value of

Lessor Company has a machine with a cost and fair value of $100,000 that it leases for a 10-year period to Lessee Company. The machine has a 12-year expected economic life. Payments are received at th...

Q: On January 1, 2017, Seven Wonders Inc. signed a

On January 1, 2017, Seven Wonders Inc. signed a five-year noncancelable lease with Moss Company. The lease calls for five payments of $277,409.44 to be made at the end of each year. The leased asset h...