Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter S, Problem 1P
Converting Operating Leases to Capital Leases
Apple Corporation discloses the following information about its noncancelable operating leases in its 2012 annual report.
| (in millions) | |
| 2013 | $ 516 |
| 2014 | 556 |
| 2015 | 542 |
| 2016 | 513 |
| 2017 | 486 |
| Thereafter | 1,801 |
| Total minimum lease payments | $4,414 |
Assume that the payment amount in the “thereafter” row is all due at the end of 2018 and that the appropriate discount rate is 6 percent. What is the present value of Apple’s “total minimum lease payments” at the end of fiscal 2012?
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Cabela's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2015 annual report (in millions).
Operating
Leases
2016
$ 24,424
2017
25,245
2018
25,065
2019
24,682
2020
24,087
Thereafter
292,668
Total
$416,171
What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0% and round the remaining lease term to the nearest whole year.
A.
$233,357 million
B.
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C.
$255,007 million
D.
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None of the above
Do not give answer in image formate
Organic Markets reports operating lease information in its 2016 annual report (in millions). You determine that a discount rate of 6.0% is appropriate for Organic Markets and calculate the following. What economic liability is
potentially left off Organic Markets' balance sheet?
Note: Round the remaining lease term to the nearest whole year, using the final lease payment provided as an estimate of annual future payments.
Year
2017
2018
2019
2020
2021
Thereafter
Minimum operating
lease payments
$650
783
836
852
854
9,728
$13,703
Select one:
O a. $8,358 million
O
b. $13,703 million.
O
c. $10,183 million
O
d. $10,060 million.
Caleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions).
Operating
Leases
2021
$48,848
2022
50,490
2023
50,130
2024
49,364
2025
48,174
Thereafter
Total
585,336
$832,342
What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%.
Chapter S Solutions
Financial Accounting
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...
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- I want correct answerarrow_forwardCaleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions). Operating Leases 2021 $48,848 2022 50,490 2023 50,130 2024 49,364 2025 48,174 585,336 $832,342 Thereafter Total What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%. Note: Round the remaining lease term to the nearest whole year, using the final lease payment provided as an estimate of annual future payments. Select one: a. $612,091 million О b. $747,426 million О c. $510,013 million О d. $620,847 million О e. $832,342 millionarrow_forwardWhich of the following statements regarding the new accounting rules, which take effect in 2019, for leases is false? If the lease term is one year or longer, a liability must be recognized. If the lease term is less than one year, an asset must be recognized. The new lease accounting rules will result in more assets and liabilities being recognized on the balance sheet. Leasing will likely remain popular under the new lease accounting rules because leases do not require a large initial outlay of cash.arrow_forward
- all questions data givenarrow_forwardDO not give answer in imagearrow_forwardCaleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions). Thereafter Total Operating Leases 2021 $24,424 2022 25,245 2023 25,065 2024 24,682 2025 What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%. Note: Round the remaining lease term to the nearest whole year, using the final lease payment provided as an estimate of annual future payments. Select one: @ . 24,087 292,668 $416,171 a. $373,713 million. b. $306,046 million. c. $416,171 million. d. $310,424 million * e. $255,007 million.arrow_forward
- How much is the interest expense to be recognized for the year 2022(for present value factors, do not round off)?arrow_forwardOn January 01, 2012, PC Options sold equipment to PC Madness and simultaneously leased it back. Pertinent information at this date are presented below. In the initial entry upon leaseback, how much is the gain to be recognized by the buyer-lessor? * Sales price P 9,000,000 Fair value 8,000,000 Carrying amount 7,200,000 Annual rental payable at the end of each year 600,000 Remaining life 20 Lease term 4 Interest rate on the lease contract 12% Borrowing rate of PC Options 11% Borrowing rate of PC Madness 10.50% а. Р800,000 b. P720,000 O c. P400,000 O d. P717,780arrow_forwardHelp me solve this TYarrow_forward
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