6.Which of the following is NOT one of the criteria for classifying a lease as a capital lease by lessees? The:

A)   lessor retains ownership of the property at the end of the lease term.

B)   term of the lease is 75 percent or more of the estimated economic life of the leased property.

C)   present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property.

D)   lease contains a bargain purchase option.

7.A lease will be classified as a capital lease if:

A)   a bargain purchase option exists.

B)   the lease period is less than 75% of the asset’s life.

C)   the title is not transferred to the lessee at the end of the lease period.

D)   the present value of the lease payments exceeds 80% of the fair value of the leased property to the lessor.

8.Which of the following statements that classify a lease as a capital lease is FALSE?

A)   A bargain purchase option exists.

B)   The present value of the lease payments is at least 80 percent of the fair market value of the asset.

C)   The lease period is at least 75 percent of the useful life of the lease.

D)   Title is transferred at the end of the lease period.

9.A company leases the following asset:

§ Market value of $200,000.

§ Useful life of 5 years with no salvage value.

§ Lease term is 4 years.

§ Annual lease payment is $30,000 and the lease rate is 11%.

§ The company’s overall borrowing rate is 9.5%.

§ The firm can purchase the equipment at the end of the lease period for $45,000.

What type of lease is this?

A)   Operating.

B)   Financing.

C)   Long term.

D)   Capital.

10.Francisco Corp. is planning to lease for its own use a $10 million milling machine to produce goods for eventual sale. Francisco is able to negotiate the structure of the lease so as to classify it as either an operating or a capital lease. The advantages to Francisco of classifying this lease as a capital lease include all of the following EXCEPT:

A)   cash flow from operations is reduced by a lower amount than under an operating lease.

B)   its ability to meet bond covenants is improved.

C)   total assets are higher.

D)   expenses are lower in the later years of the lease.

答案和详解如下：

6.Which of the following is NOT one of the criteria for classifying a lease as a capital lease by lessees? The:

A)   lessor retains ownership of the property at the end of the lease term.

B)   term of the lease is 75 percent or more of the estimated economic life of the leased property.

C)   present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property.

D)   lease contains a bargain purchase option.

The correct answer was A)

If the lease transfers ownership of the property to the lessee at the end of the lease term, the lessee will classify the lease as a capital lease.

7.A lease will be classified as a capital lease if:

A)   a bargain purchase option exists.

B)   the lease period is less than 75% of the asset’s life.

C)   the title is not transferred to the lessee at the end of the lease period.

D)   the present value of the lease payments exceeds 80% of the fair value of the leased property to the lessor.

The correct answer was A)

The lease would be classified as a capital lease if it meets just one of the following criteria:

1.   A bargain purchase option exists.

2.   The lease period is at least 75% of asset’s life.

3.   The title is transferred to the lessee at the end of the lease period

4.   The present value of the lease payments are equal to or exceed 90% of the fair value of the leased property to the lessor.

8.Which of the following statements that classify a lease as a capital lease is FALSE?

A)   A bargain purchase option exists.

B)   The present value of the lease payments is at least 80 percent of the fair market value of the asset.

C)   The lease period is at least 75 percent of the useful life of the lease.

D)   Title is transferred at the end of the lease period.

The correct answer was B)

For a lease to be classified as a capital lease the present value of the lease payments must be at least 90 percent of the fair market value of the asset.

9.A company leases the following asset:

§ Market value of $200,000.

§ Useful life of 5 years with no salvage value.

§ Lease term is 4 years.

§ Annual lease payment is $30,000 and the lease rate is 11%.

§ The company’s overall borrowing rate is 9.5%.

§ The firm can purchase the equipment at the end of the lease period for $45,000.

What type of lease is this?

A)   Operating.

B)   Financing.

C)   Long term.

D)   Capital.

The correct answer was D)

The 4 year lease term is greater than 75% of the asset's 5 year life making this a capital lease.

10.Francisco Corp. is planning to lease for its own use a $10 million milling machine to produce goods for eventual sale. Francisco is able to negotiate the structure of the lease so as to classify it as either an operating or a capital lease. The advantages to Francisco of classifying this lease as a capital lease include all of the following EXCEPT:

A)   cash flow from operations is reduced by a lower amount than under an operating lease.

B)   its ability to meet bond covenants is improved.

C)   total assets are higher.

D)   expenses are lower in the later years of the lease.

The correct answer was B)

A firm that is concerned about bond covenants is better off with an operating lease. Capital leases increase both debt and assets, and often leverage ratios are less favorable as a result.