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 2P
Converting Operating Leases to Capital Leases
LOS-1, S-3 Refer to Apple’s operating lease disclosure provided in S P-l. Assume that the payment amount in the ‘‘thereafter” row is equally spread out over the years 2018–2022 and that the appropriate discount rate is still 6 percent. What is the present value of Apple’s “total minimum lease payments” at the end of fiscal 2012?
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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 million
Dhapa
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
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 million
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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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
- Caleb'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_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 Thereafter Total 585,336 $832,342 What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%.arrow_forwardOrganic 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.arrow_forward
- 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. $ 15,113 million C. $255,007 million D. $373,713 million E. None of the above Do not give answer in image formatearrow_forwardfill all questuins dataarrow_forwardThe following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.Inception date: May 1, 2025 Annual lease payment due at the beginning of each year, beginning with May 1, 2025: $30,000 Bargain-purchase option price at end of lease term = $10,000 Lessor's implicit rate = 7% The lease term ends in FIVE years on April 30, 2030. What is the present value of the asset being leased? Recommendation: draw a timeline of the cash flows from the lessee to the lessor.arrow_forward
- es On September 1, 2024, Custom Shirts Incorporated entered into a lease agreement appropriately classified as an operating lease. The lease term is three years. The annual payments by Custom Shirts are (a) $20,000 for year 1, (b) $24,000 for year 2, and (c) $28,000 for year 3. How much total lease expense will Custom Shirts recognize for 2024? Multiple Choice $20,000 $6,667 $8,000 $24,000arrow_forwardProvide correct answer for this questionarrow_forwardWhat amount should Steak Town report as lease liability and interest expense, respectively in their December 31, 2022 financial statements?arrow_forward
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