1.Operating and capital leases, respectively, are recorded on financial statements as:
| Operating Lease | Capital Lease |
A) Expense Equity
B) Expense Liability
C) Depreciation Asset
D) Liability Depreciation
2.Penguin Company is planning to lease a $5 million machine to produce goods for eventual sale. Penguin is able to structure the lease so as to classify it as either an operating or a capital lease.
The advantages to Penguin of classifying this lease as an operating lease include all of the following EXCEPT:
A) the lease is not reported as debt on Penguin's balance sheet, so leverage ratios are not increased.
B) no disclosures of payments due under the lease are required.
C) the lease is not reported as an asset, so profitability ratios are not reduced.
D) depreciation is not recorded.
3.The present value of the lease payments for Lease ABC is equal to 75 percent of the fair value of the asset, and the lease contains a bargain purchase option. Lease XYZ does not contain a bargain purchase option, but the lease term is equal to 80 percent of the estimated economic life of the property. How should these leases be classified in the financial statements of the lessee?
A) Both leases should be classified as operating leases.
B) Lease ABC should be a capital lease, but Lease XYZ should be an operating lease.
C) Lease ABC should be an operating lease, but Lease XYZ should be a capital lease.
D) Both leases should be classified as capital leases.
4.Which of the following is NOT a criteria for a lease to be classified as a capital lease?
A) Ownership in the asset is transferred at the end of the lease term.
B) The lease contains a bargain purchase option.
C) The present value of the minimum lease payments is 90% or more of the fair value of the asset at the inception of the lease.
D) The lease term is equal to 90% or more of the estimated economic life of the asset.
5.One criterion for a capital lease is that the term of the lease must equal a minimum percentage of the leased property's economic life at the inception of the lease. The minimum percentage is:
A) 41%.
B) 75%.
C) 50%.
D) 90%.
答案和详解如下：
1.Operating and capital leases, respectively, are recorded on financial statements as:
| Operating Lease | Capital Lease |
A) Expense Equity
B) Expense Liability
C) Depreciation Asset
D) Liability Depreciation
The correct answer was B)
Operating lease payments are recorded as rent expense on the lessee's income and cash flow from operations statements. Capital leases are recorded on the lessee's balance sheet as an asset and liability and depreciated on the income statement with cash flow from operations reduced by the interest expense and cash flow from financing reduced by the principal payment.
2.Penguin Company is planning to lease a $5 million machine to produce goods for eventual sale. Penguin is able to structure the lease so as to classify it as either an operating or a capital lease.
The advantages to Penguin of classifying this lease as an operating lease include all of the following EXCEPT:
A) the lease is not reported as debt on Penguin's balance sheet, so leverage ratios are not increased.
B) no disclosures of payments due under the lease are required.
C) the lease is not reported as an asset, so profitability ratios are not reduced.
D) depreciation is not recorded.
The correct answer was B)
Cash payments due under an operating lease must be disclosed in the notes to the financial statements for each of the following five years and in aggregate. Operating leases are simpler to account for and the often adverse ratio implications of offsetting increases in assets and liabilities are avoided.
3.The present value of the lease payments for Lease ABC is equal to 75 percent of the fair value of the asset, and the lease contains a bargain purchase option. Lease XYZ does not contain a bargain purchase option, but the lease term is equal to 80 percent of the estimated economic life of the property. How should these leases be classified in the financial statements of the lessee?
A) Both leases should be classified as operating leases.
B) Lease ABC should be a capital lease, but Lease XYZ should be an operating lease.
C) Lease ABC should be an operating lease, but Lease XYZ should be a capital lease.
D) Both leases should be classified as capital leases.
The correct answer was D)
Lease ABC contains a bargain purchase option, and the lease term for Lease XYZ is more than 75 percent of the economic life of the asset. Both leases will be treated as capital leases by the lessee.
4.Which of the following is NOT a criteria for a lease to be classified as a capital lease?
A) Ownership in the asset is transferred at the end of the lease term.
B) The lease contains a bargain purchase option.
C) The present value of the minimum lease payments is 90% or more of the fair value of the asset at the inception of the lease.
D) The lease term is equal to 90% or more of the estimated economic life of the asset.
The correct answer was D)
To be considered a capital lease, the lease term should be equal to 75 percent or more of the estimated economic life of the asset, not 90 percent.
5.One criterion for a capital lease is that the term of the lease must equal a minimum percentage of the leased property's economic life at the inception of the lease. The minimum percentage is:
A) 41%.
B) 75%.
C) 50%.
D) 90%.
The correct answer was B)
A lease is classified as a capital lease if one of the following criteria is met:
a) The title is transferred to the lessee at the end of the lease period.
b) a bargain purchase option exists
c) The lease period is at least 75% of the asset's life.
d) The present value of the payments is at least 90% of the fair value of the asset.
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