GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter S, Problem 1C
Analyzing Starbucks’s Lease Disclosures
The following questions pertain to Starbucks’s 2012
- 1. Does Starbucks sign mainly operating or capital leases?
- 2. Where does Starbucks disclose its operating leases on its balance sheet?
- 3. Assume a discount rate of 6 percent and that the amount in the “thereafter” row in Starbucks’s foot-note disclosure is equally spread over the years 2018-2022. What is the present value of Starbucks’s operating leases at the end of fiscal 2012?
- 4. What is the impact on Starbucks’s 2012 debt-to-equity ratio of adding the present value of its operating leases to the liability section of its 2012 balance sheet?
- 5. Would making the adjustment in requirement (4) change your opinion about Starbucks’s creditworthiness?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Help me solve this TY
Dhapa
Provide correct answer for this question
Chapter S Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. S - Defining a Lessor Which of the following best...Ch. S - Prob. 2MCQCh. S - Prob. 3MCQCh. S - Prob. 4MCQCh. S - Prob. 5MCQCh. S - Prob. 6MCQCh. S - Prob. 1MECh. S - Prob. 2MECh. S - Prob. 3MECh. S - Prob. 4ME
Ch. S - Prob. 1ECh. S - Prob. 2ECh. S - Prob. 3ECh. S - Prob. 4ECh. S - Calculating a Deferred Tax Liability LOS-5 On...Ch. S - Prob. 6ECh. S - Prob. 7ECh. S - Prob. 8ECh. S - Prob. 9ECh. S - Prob. 10ECh. S - Converting Operating Leases to Capital Leases...Ch. S - Converting Operating Leases to Capital Leases...Ch. S - Computing Effective Tax Rates LOS-4 Below is...Ch. S - Prob. 4PCh. S - Prob. 5PCh. S - Prob. 6PCh. S - Analyzing Starbuckss Lease Disclosures The...Ch. S - Analyzing Disneys Income Tax Disclosures The...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Assume Fortune Brands, Inc., reports the following footnote relating to its leased facilities in its 2016 10-K report. Future minimum rental payments under noncancelable operating leases as of December 31, 2016 are as follows: (In millions) 2017.. 2018. 2019. 2020. 2021. Remainder. Total minimum rental payments.. Compute the present value of these operating leases using a discount rate of 7% and round the remaining lease life to the nearest whole year. Select one: O O O $ 45.6 33.5 26.9 20.2 15.7 37.3 $179.2 A. $179.2 million B. $140.7 million C. $127.3 million D. $154.9 millionarrow_forwardfill all questuins dataarrow_forwardSouthwest Airlines provides scheduled air transportation services in the United States. Like many airlines, Southwest leases many of its planes from Boeing Company. In its long-term debt disclosure note included in the financial statements for the year ended December 31, 2013, the company listed $56 million in lease obligations. The existing leases had an approximate eight-year remaining life and future lease payments average approximately $8 million per year. Required: 1. Determine the effective interest rate the company used to determine the lease liability assuming that lease payments are made at the end of each fiscal year. 2. Repeat requirement 1 assuming that lease payments are made at the beginning of each fiscal year.arrow_forward
- all questions data givenarrow_forwardHelp with parts 4 and 5. 4. Prepare journal entries for Sax for the years 2016 and 2017. 5. Next Level If the lease term is 3 years and the annual payment is $110,000, how would Sax classify the lease under (a) U.S. GAAP and (b) IFRS?arrow_forwardTOPIC: LEASESCompute for the following (show solution):a. Manufacturer's profit recognized in the year 2020.b. Total financial revenue pertaining to the lease.c. Interest Revenue recognized in the year 2020.d. Net Finance lease Receivable balance, December 31, 2020.arrow_forward
- I want correct answerarrow_forwardHi expert give all questions answer in detailsarrow_forwardbased on the lease obligations by year visualization, what trend is being shown? a. the operating lease obligations are decreasing every year from 2021 to 2025 for both companies. b. the finance lease obligations are increasing every year from 2021 to 2025 for both companies. c. the operating lease obligations are decreasing every year from 2021 to 2025 for kroger only d. the finance lease obligations are increasing every year from 2021 to 2025 for kroger only.arrow_forward
- Southwest Airlines provides scheduled air transportation services in the United States. Like many airlines, South-west leases many of its planes from Boeing Company. In its long-term debt disclosure note included in the financial statements for the year ended December 31, 2019, the company listed $627 million in lease obligations. The existing leases had an approximate ten-year remaining life and future lease payments average approximately $75 million per year. Required: 1. Determine the effective interest rate the company used to determine the lease liability assuming that lease payments are made at the end of each fiscal year. 2. Repeat requirement 1 assuming that lease payments are made at the beginning of each fiscal year.arrow_forward1. What amount should be reported as lease liability on December 31, 2021? 2. What is the interest expense for 2022?arrow_forwardTOPIC: LEASESCompute for the following (show solution):a. How much total profit should Technocraft recognize for the year ended December 31, 2020?b. How much interest expense shall Marina Sands recognize for the year ended December 31, 2020?c. What amount shall Marina Sands report for the equipment at December 31, 2021?d. What amount of interest revenue should Technocraft report for the year ended December 31, 2020?e. What amount of financial asset shall Technocraft report at December 31, 2020?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Accounting for Finance and Operating Leases | U.S. GAAP CPA Exams; Author: Maxwell CPA Review;https://www.youtube.com/watch?v=iMSaxzIqH9s;License: Standard Youtube License