Verizon Communications Inc. provides the following footnote relating to adoption of the new lease accounting standards (Topic 842) in its 10-Q report for the quarter ended March 31, 2019. The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of Topic 842 were as follows: Adjustments ($ millions) At Dec. 31, 2018 due to Topic 842 At Jan. 1, 2019 Prepaid expenses and other $7,089 $(428) $6,661 Operating lease right-of-use assets - 30,213 30,213 Other assets 15,232 (2,662) 12,570 Accounts payable and accrued liabilities 22,501 (3) 22,498 Other current liabilities 8,239 (2) 8,237 Current operating lease liabilities - 3,810 3,810 Deferred income taxes 33,795 139 33,934 Noncurrent operating lease liabilities - 24,964 24,964 Other liabilities 13,922 (1,815) 12,107 Retained earnings 56,605 533 57,138 Noncontrolling interests 2,035 1 2,036 Rent expense for operating leases is recognized on a straight-line basis over the term of the lease and is included in either Cost of services of Selling, general and administrative expense in our condensed consolidated statements of income, based on the use of the facility on which rent is being paid. What is the amount of the right-of-use asset the company added to its balance sheet upon adoption of the new standard? $Answer million Assume the right-of-use assets had a weighted average lease term of 12 years. Approximate the effect the operating leases had on Verizon's income statement in Q1 2019. Round to the nearest million. The rental expense in Q1 would be $Answer million What is the amount of the total operating lease liabilities the company added to its balance sheet upon adoption of the new standard?

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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Verizon Communications Inc. provides the following footnote relating to adoption of the new lease accounting standards (Topic 842) in its 10-Q report for the quarter ended March 31, 2019.
The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of Topic 842 were as follows:

		Adjustments
($ millions)	At Dec. 31, 2018	due to Topic 842	At Jan. 1, 2019
Prepaid expenses and other	$7,089	$(428)	$6,661
Operating lease right-of-use assets	-	30,213	30,213
Other assets	15,232	(2,662)	12,570
Accounts payable and accrued liabilities	22,501	(3)	22,498
Other current liabilities	8,239	(2)	8,237
Current operating lease liabilities	-	3,810	3,810
Deferred income taxes	33,795	139	33,934
Noncurrent operating lease liabilities	-	24,964	24,964
Other liabilities	13,922	(1,815)	12,107
Retained earnings	56,605	533	57,138
Noncontrolling interests	2,035	1	2,036

Rent expense for operating leases is recognized on a straight-line basis over the term of the lease and is included in either Cost of services of Selling, general and administrative expense in our condensed consolidated statements of income, based on the use of the facility on which rent is being paid.

What is the amount of the right-of-use asset the company added to its balance sheet upon adoption of the new standard?
$Answer million

Assume the right-of-use assets had a weighted average lease term of 12 years. Approximate the effect the operating leases had on Verizon's income statement in Q1 2019.
Round to the nearest million.
The rental expense in Q1 would be $Answer million

What is the amount of the total operating lease liabilities the company added to its balance sheet upon adoption of the new standard?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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