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Explain the theoretical basis for the accounting standard that requires certain long-term leases to be capitalized by the lessee.
You are an accountant for the ABC Mining Company, and the CFO gives you a copy of a recent lease agreement to record.
What does the information in a statement of cash flows help external users to assess?
What are "cash equivalents"? How does a company's reporting on its cash and cash equivalents affect the statement of cash flows?
Briefly describe a retail company's operating cycle and the relationship of its various stages to cash inflows and outflows.
Briefly describe the indirect method for reporting a company's net cash flow from operating activities.
Give two examples of a company's investing and financing activities not affecting cash.
Indicate how a company computes the amount of interest and income taxes that it paid during the year.
What two alternatives are allowed for where a company may disclose the net cash flow from operating activities prepared under the indirect method.
Prepare a schedule to compute the amount of the net gain or loss to include in the Kent Company's pension expense for 2010 through 2012.
The company decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of the employees.
The president of Fink Company is slightly familiar with GAAP, and understands that accounting for a defined benefit pension plan may result in certain items .
Describe the methods by which GAAP avoids year-to-year fluctuations in the amount of pension expense.
One easy way to increase our profits would be for the board of directors to vote to increase the discount rate used for computing the present values.
Explain why companies may have reduced benefits when they adopted new GAAP.
They are too high and they are making us uncompetitive against our foreign competitors whose employees have state-funded pensions.
List seven advantages to the lessee of leasing, as compared with purchasing, an asset.
Define the following terms-lease, sales-type lease, direct financing lease, sale-leaseback transaction.
Describe briefly the accounting procedures followed by the lessor and by the lessee for an operating lease.
What is the basic difference between the accounting procedures used by a lessor for a sales-type lease and those used for a direct financing lease?
Why are compound interest concepts appropriate and applicable in accounting for a direct financing lease?
The new lease is acceptable to the lessor, who agrees that McFarland Company has completed its primary obligation.
Discuss the similarities and differences between the indicators of finance leases under IFRS and the criteria for capitalizing leases under U.S. GAAP.
What distinguishes a leveraged lease from other leases? What, if any, is the major difference in the accounting of the lessee for a leveraged lease?
The fair value of the equipment at lease inception is $100,000. Assume that the present value of minimum lease payments is $50,000.