Info
Warning
Danger

Study Resources (Accounting)

13) The following are characteristics of a lease: Price of leased asset from manufacturer 193,000 Lease payments 50,000 Lease term 5 years Lease frequency Annual Payment timing End of year Guaranteed residual value 35,000 Interest rate implicit in the lease agreement 14% Required: Determine the appropriate classification for this lease for the lessor (who is not the manufacturer) and record the journal entries for the lessor.
9 Views
View Answer
11) The following are the characteristics of a lease: Fair value of leased asset 150,000 Lease payments 25,500 Lease term 7 Payment frequency Annual Payment timing End of year Guaranteed residual value None Interest rate implicit in lease 8%   Required: Determine the present value of minimum lease payments (MLP) and the appropriate classification of this lease for the lessee. 12) The following are the characteristics of a.
7 Views
View Answer
26) The following are some of the characteristics of an asset available for lease: Fair value of leased asset 150,000 Lease term 8 years Payment frequency Annual Payment timing Beginning of year Guaranteed residual value 25,000 Interest rate implicit in lease (not known to lessee) 11% Lessee's incremental borrowing rate 9%   Required: a. Determine the amount of lease payment that the lessor would require to lease.
8 Views
View Answer
6) Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template: Item Presentation and Disclosure Income tax expense Composition of income tax expense Taxes on discontinued operations Comprehensive income Permanent differences Offsetting Different jurisdiction and component entities According to source Tax losses carried forward .
8 Views
View Answer
16.5   Learning Objective 5 1) For the year ended October 31, 2018, NB Financial Group (National Bank) reported income before tax of $2,160 million and income tax expense of $274 million, for an effective tax rate of 12.7% ($274m / $2,160m). In the notes to the financial statements, NB's disclosures included.
6 Views
View Answer
8) What amount is included in the pension reconciliation for the balance sheet? A) Current service cost. B) Unamortized actuarial gains. C) Benefit paid. D) Contributions paid. 9) What amount will be presented on the balance sheet for fiscal 2017? Fiscal 2016 Fiscal 2017 Fair value of pension plan assets 50,000,000 45,000,000 Accrued pension obligation 60,000,000 42,000,000 Contributions 7,000,000 10,000,000 Benefits 8,000,000 8,000,000 A) $3,000,000 surplus B) $3,000,000 deficit C) $5,000,000 D) $8,000,000 10).
6 Views
View Answer
15) During its first year of operations, Karol Corp. reported the following information: ?Income before income taxes for the year was $550,000 and the tax rate was 35%. ?Depreciation expense was $100,000 and CCA was $50,000. ?Warranty expense was reported at $20,000, while actual cash paid out was $10,000. ?$25,000 of expenses included in.
9 Views
View Answer
18.4   Learning Objective 4 1) In general, which statement is correct? A) Lessees prefer finance leases. B) Lessees prefer operating leases. C) Operating leases are more favourable to the lessor in the short term. D) Finance leases are more favourable to the lessee in the short term. 2) Why do the supporting indicators for lease classification.
8 Views
View Answer
12) Cerebral Corporation started operations on March 1, 2017. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. The equipment has a useful life of 5 years and would be depreciated on a straight-line basis. No residual value is expected.
6 Views
View Answer
14) What are actuarial losses or gains in a defined benefit plan? A) Plan amendments that retrospectively improve pension plan benefits. B) Expected income earned on the pension plan assets. C) Difference arising between the actual and the expected value of plan obligations. D) Differences arising between the actual and expected values of the.
8 Views
View Answer
15) On July 1, 2017, Janus Company leased equipment to Pluto Company. The terms of the lease are as follows:   Fair value of leased asset 60,000 Lease payments, due at end of lease term starting June 30, 2018 12,000 Lease term 9 years Economic life of leased asset 10 years Guaranteed residual value 6,000 Lessee's incremental borrowing rate 15%   Pluto uses straight-line depreciation.
9 Views
View Answer
18.3   Learning Objective 3 1) Which statement is correct about the "guaranteed residual value"? A) It is assurance that the lessee will take care of the property. B) It is provided by the lessor. C) Lessor assumes the risk of the property falling below the guaranteed amount. D) It is not included in the minimum.
7 Views
View Answer
18.2   Learning Objective 2 1) List four examples of the risks and four examples of rewards of ownership. 2) What are executory costs? A) Maintenance costs that are applicable to only operating leases. B) Maintenance costs that are incurred only when the asset is leased. C) Maintenance costs that are incidental costs in a lease.
5 Views
View Answer
17.3   Learning Objective 3 1) Which statement best explains the meaning of "current service cost"? A) The present value of pension benefits that employees have earned. B) The increase in the present value of a defined benefit obligation resulting from employee service in the current period. C) The amount of funds deposited with the.
20 Views
View Answer
28) The following are some of the characteristics of an asset available for lease: Fair value of leased asset 88,000 Useful life 10 years Lease term 7 years Payment frequency Annual Payment timing Beginning of year Guaranteed residual value 10,000 Interest rate implicit in lease (not known to lessee) 10% Lessee's incremental borrowing rate 8% Required: a. Determine the amount of lease payment that the lessor would require.
6 Views
View Answer
18.1   Learning Objective 1 1) Which statement is correct? A) In an operating lease, the lessee uses the asset for most of the asset's useful life. B) The lessee expenses the cost of the lease in the period the benefits are received in an operating lease. C) An operating lease transfers the risks and.
17 Views
View Answer
10) Viribana Corporation started operations on March 1, 2017. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. Option 1: Lease the equipment for 10 years. Lease payments would be $11,200 per year, due at the beginning of each fiscal.
4 Views
View Answer
22) Here are the terms of a lease agreement: Fair value of leased asset 50,000 Lease term 4 years Payment frequency Annual Payment timing End of year Guaranteed residual value 25,000 Interest rate implicit in lease (known to lessee) 5% Lessee's incremental borrowing rate 8% Required: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
8 Views
View Answer
9) Which of the following component refers to the benefits earned by employees in a defined benefit plan? A) Interest cost on pension obligations. B) Income from plan assets. C) Amortization of past service cost. D) Amortization of actuarial gains and losses. 10) Which of the following component refers to the services provided by the.
9 Views
View Answer
23) A company has a defined benefit pension asset of $1,050,000 at the beginning of the year. The company contributes $5,500,000 to the pension during the year and records a pension expense of $8,200,000.   Required: Determine the value of the defined benefit pension liability at year-end. $1,650,000 cr 24) A company has a defined.
9 Views
View Answer
35) For the following lease, determine the minimum present value calculation for the lessor. Annual payment (due at end of year) $23,000 Lease term 5 Incremental rate 10% Implicit rate (known to lessee) 8% Unguaranteed residual value NA Guaranteed residual value 25,000 A) 91,832 B) 102,711 C) 105,444 D) 108,846 36) For the following lease, determine the minimum present value calculation for the lessee. Annual payment (due at.
7 Views
View Answer
30) Five Star Hotels provides a defined benefit pension for its employees. At the end of fiscal year 2016, which ended on December 31, the pension plan supplied Five Star Hotels with information about the pension, which is summarized in the following tables: Opening assets, January 1 $ 2,100,000 + Funding 500,000 + Expected return.
6 Views
View Answer
16) Here are the terms of a lease agreement: Fair value of leased asset 250,000 Lease term 4 years Payment frequency Annual Payment timing End of year Guaranteed residual value 25,000 Interest rate implicit in lease (known to lessee) 14% Lessee's incremental borrowing rate 16% Required: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
8 Views
View Answer
13) Here are the terms of a lease agreement: Fair value of leased asset 250,000 Lease term 10 years Payment frequency Annual Payment timing End of year Guaranteed residual value 0 Interest rate implicit in lease (known to lessee) 9% Lessee's incremental borrowing rate 9% Required: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
12 Views
View Answer
17.2   Learning Objective 2 1) What is the pension expense for the following plan? "The plan requires the company to contribute $500 for each of its 1,000 employees. The plan hopes to accumulate enough funds so that each retiree receives $20,000 in the future; the company has no obligation to guarantee the.
7 Views
View Answer
17.6   Comprehensive Question 1) Capricious Co. Ltd. (Cap) operates a defined benefit pension plan that offers its employees an annual retirement income based on years of service and average of the final five years' earnings prior to retirement. On January 1, 2015, Cap improved the pension benefits by increasing the percentage of.
24 Views
View Answer
17.4   Learning Objective 4 1) What four accounts are affected by the accounting for a defined benefit pension plan? A)  Cash, pension expense, OCI, and the defined benefit asset or liability B) Expected gains and losses, cash, income, pension expense C) Pension liability, pension expense, cash, income D) Pension expense, pension assets, pension liability, cash 2).
8 Views
View Answer
14) Boris Corporation started operations on March 1, 2017. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. Option 1: Lease the equipment for 5 years. Lease payments would be $12,000 per year, due at the beginning of each fiscal.
6 Views
View Answer
14) Masons' balance sheet shows a defined benefit asset of $740,000. Records show that there are $89,000 of past service costs and $610,000 of actuarial losses that remain unamortized. Required: Using the pension reconciliation required in the company's note disclosures, determine the pension plan's surplus or deficit. 15) Feldman has a defined benefit.
5 Views
View Answer
4) Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template: Item Presentation and Disclosure Income Tax Expense Composition of Income Tax Expense Taxes on discontinued operations Comprehensive income Permanent Differences Offsetting Different jurisdiction and component entities According to source Tax losses carried forward 5) Under ASPE, Section 3465 indicates less onerous disclosures as.
7 Views
View Answer
17.5   Learning Objective 5 1) Which statement is correct? A) The defined benefit liability or asset must be separately identified on the income statement. B) The components of pension expense must be disclosed in the notes to the statements. C) The defined benefit liability or asset must be separately identified on the balance sheet. D).
8 Views
View Answer
18) The following are some of the characteristics of an asset available for lease:   Fair value of leased asset 120,000 Useful life 10 years Lease term 7 years Payment frequency Annual Payment timing Beginning of year Unguaranteed residual value 10,000 Interest rate implicit in lease (not known to lessee) 15% Lessee's incremental borrowing rate 14% Required: a. Determine the amount of lease payment that the lessor would require.
8 Views
View Answer
5) Complete this table identifying the key differences between IFRS and ASPE standards for leasing. ISSUE IFRS ASPE Lease capitalization criteria–lessee Lease capitalization criteria–lessor Lessor's classification of finance (capital) leases Lessee's discount rate for present value calculations 6) Assume that Speery agrees to lease a new machine from LEERY on January 1, 2017, for $30,000 per year, paid.
7 Views
View Answer
20) Salisbury Creamery leases its ice cream making equipment from Little Rock Finance Company under the following lease terms:   ?The lease term is five years, non-cancellable, and requires equal rental payments of $56,926 due at the beginning of each year starting January 1, 2016. ?Upon inception of the lease on January 1,.
6 Views
View Answer
11) Chambers leased equipment to Montga Company on November 1, 2016. The terms of the lease are as follows: Lease term 10 years Economic life of leased asset 12 year Fair value of leased asset 104,000 Guaranteed residual value 10,000 Lease payments, due each Nov 1 12,000 Lessee's incremental borrowing rate 5% Montga uses straight-line depreciation for its property, plant, and equipment.   Required: a. Prepare.
6 Views
View Answer
17.1   Learning Objective 1 1) Which of the following best describes a "defined benefit plan"? A) High returns in the pension plan result in higher benefit payments to the employees in the future. B) A pension plan that specifies how much funds the employee needs to contribute. C) A plan that requires the employer.
25 Views
View Answer
24) Here are the terms of a lease agreement: Fair value of leased asset 175,000 Lease term 8 years Payment frequency Annual Payment timing End of year Guaranteed residual value 15,000 Interest rate implicit in lease (known to lessee) 6% Lessee's incremental borrowing rate 8% Required: Determine the amount of lease payment that the lessor would require to lease the asset. 25) The following are some of.
7 Views
View Answer
8) Why do lessors prefer financing lease treatment over operating lease treatment? 9) Which statement is true? A) The guaranteed residual value is provided by the lessor. B) The bargain purchase option is not a part of the minimum lease payment calculation. C) The incremental borrowing rate is the interest rate that the lessor.
7 Views
View Answer
17) Changing Assumptions Ltd. has the following details related to its defined benefit pension plan as at December 31, 2013: Pension fund assets of $1,900,000 and Actuarial obligation of $1,806,317. The actuarial obligation represents the present value of a single benefit payment of $3,200,000 that is due on December 31, 2019,.
7 Views
View Answer
19) Prepare the Summarized Pension Actuary's Report on Pension Plan Obligations (without numbers) in good form. 20) A company reported $430,000 of pension expense in its income statement. The company fully paid the amount of pension expense owed to the trustee. The balance sheet showed that the pension asset increased by.
7 Views
View Answer