12) Based solely upon the following sets of circumstances rise to a sales-type l
ID: 2555573 • Letter: 1
Question
12) Based solely upon the following sets of circumstances rise to a sales-type lease i? indicated below, which set gives Transfers Ownership Contains Bargain Asset has no alternative Purchase Option? Yes No Yes Yes a. No Yes Yes No Yes No Yes Yes c. 13). F should be recorded by the lessee as a(n): A. Asset and a liability. B. Asset and a different amount should be recorded as a liability. C. Liability and a different amount should be recorded as an asset. D. Expense. or a finance lease, an amount equal to the present value of the minimum lease payments 14). The five criteria provided in GAAP for distinguishing a capital lease from an operating lease do not include: A. The agreement specifies that ownership transfers at the end of the lease term. B. The present value of lease payments equals or exceeds "substantially all fair" value of asset. C. The agreement contains a purchase option. D. The noncancelable lease term is 75% or more of the useful life of the leased asset. 15) In computing the annual lease payments, the lessor deducts only a guaranteed residual 16). In the operating lease, interest expense and amortization expense are shown separately on 17) Both a guaranteed and an unguaranteed residual value affect the lessee's computation of 18). Operating lease liability is reported in balance sheet of lessee as a "non-debt liability". 19). Property tax is added as part of lease payment instead of as an expense. TRUE FALSE TRUE FALSE value from the fair market value of a leased asset. TRUE FALSE the income statement for good reporting purposes FALSE amounts capitalized as a leased asset. TRUE TRUE FALSE 20) A capitalized leased asset is always depreciated over the term of the lease by the lesse TRUE FALSE A deferred tax liability represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end of the current year. TRUE FALSE 21) .Explanation / Answer
The answers to the above questions are as follows:
12. b
13.a
15. False
16. True
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