On July 2010 Earthmover Limited purchased an Earthmover for Sh.11,372,000/= to be leased. The Machine is expected to have a 5-year economic life with no residual value. The Machine was leased immediately to Massey Ferguson Ltd. For 3,000,0000/= a year. Payable end of every on June 30th,starting year 2011. The lease term is for 5 years with no renewal or bargain purchase option. Earthmover Ltd takes possession of the asset at the end of the lease term. Massey Ferguson uses 10% for lease capitalization purposes. Assume straight line method of depreciation

On July 2010 Earthmover Limited purchased an Earthmover for Sh.11,372,000/= to be leased. The Machine is expected to have a 5-year economic life with no residual value. The Machine was leased immediately to Massey Ferguson Ltd. For 3,000,0000/= a year. Payable end of every on June 30th,starting year 2011. The lease term is for 5 years with no renewal or bargain purchase option. Earthmover Ltd takes possession of the asset at the end of the lease term. Massey Ferguson uses 10% for lease capitalization purposes. Assume straight line method of depreciation

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In Note 11, of its 2018 financial statements, Chipotle (CMG) reported the following future operat- ing lease information: E5.12 Contractually required future minimum cash lease payments under existing operating leases as of December 31, 2018, are as follows: $ 294,191 296,579 294,941 295,290 2019 2020 . 2021 2022 290,980 2,478,397 2023 Thereafter. Total minimum lease payments $3,950,378 a. Assuming a discount rate of 5 percent, estimate the unrecognized asset and liability for assets acquired under operating leases for CMG at December 31, 2018. b. Given the estimated unrecognized liability calculated in part a., what impact does including this amount have on the liabilities of CMG reported on the balance sheet?
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See attached picture D) How should Evans report the lease transaction on its December 31, 2017 balance sheet?
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