答案和详解如下： 31.Assume the following capital lease: §
Present value (PV) of lease payments at 12 percent is $25,000. §
The leased asset is depreciated straight line over 6 years. §
The lease payment is $6,000. §
The first payment of $6,000 is to be paid at the end of the year. On a before tax basis, the income reported under capital lease compared with that reported under an operating lease for the first year will be: A) -$1,167. B) $1,167. C) -$3,000. D) $3,000. The correct answer was A) |
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| Interest expense | $3,000 | Rental expense | $6,000 | Depreciation expense | |
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| Total: | | Total: | |
Capital lease total expense – Operating lease total expense = $1,167 Since expense is $1,167 higher for the capital lease, before-tax income is $1,167 lower. Interest expense is found by taking the minimum discount rate x PV of lease payments = (0.12)($25,000) = $3,000
32.Which of the following statements about leases is FALSE? A) A capital lease results in higher liabilities compared to an operating lease. B) Cash flow from investing is higher for a capital lease than an operating lease. C) Net income is lower in the early years of a capital lease than an operating lease. D) Total cash flow is the same for both an operating lease and a capital lease. The correct answer was B) Cash flow from investing is not affected by a lease being either a capital or an operating lease. If the lease is an operating lease then the total cash payment for the lease reduces cash flow from operations. Capital leases reduce cash flow from operations by only the portion of the lease payment attributed to interest expense. Cash flow from financing is reduced by the rest of the capital lease payment which is the principal part of the payment.
33.On December 31, 2005, Wander Company executed a three-year lease with annual payments of 1,200,000 for machinery for its recycling facility. The economic life of the equipment was five years and its fair market value at the time the lease was signed was $3,750,000. The interest rate implicit in the lease was 6 percent. Wander Company’s incremental borrowing rate was 8 percent. Treating the above transaction as an operating lease, Wander’s income statement for the year ended December 31, 2006 was as follows: (in $) Sales | 18,200,000 | Cost of Goods Sold | (8,100,000) | Gross Profit | 10,100,000 | Depreciation | (1,200,000) | Lease Expense | (1,200,000) | Sales and Administration | (3,100,000) | Operating Profit | 4,600,000 | Interest Expense | (1,100,000) | Income taxes | (1,500,000) | Net Income | 2,000,000 |
After considering whether the machinery lease should be reclassified as a capital lease, Wander’s operating profit will: A) remain at $4,600,000. B) increase from $4,600,000 to $4,730,795. C) increase from $4,600,000 to $5,930,795. D) decrease from $4,600,000 to $4,538,338. The correct answer was A) Wander’s lease is classified as an operating lease, because it meets none of the four alternative criteria for classifying a lease as a capital lease: 1. There is no title transfer at the end of the lease. 2. There is no bargain purchase option. 3. The lease period is not at least 75% of the asset’s life (3 years / 5 years =) 60%. 4. The present value of the lease payments using a 6% interest rate (which is the minimum of the lessee’s incremental borrowing rate (8%) or the rate implicit in the lease (6%) is $3,207,614, which is ($3,207,614 / $3,750,000) = 85.5%, which is less than 90% of the value of the fair value of the asset. All of the lease payments in an operating lease are subtracted from gross profit and enter into the computation of operating profit. Operating profit is unchanged from the original computation.
34.On December 31, 2003 Upward Company executed a 10-year lease with annual payments of $400,000 beginning December 31, 2004 for factory equipment. The economic life of the equipment was 15 years. The interest rate implicit in the lease was 7 percent. Upward’s incremental borrowing rate was 9 percent. Under the terms of the lease, Upward may purchase the equipment at the end of the lease at the then-current fair market value of the equipment. The fair market value of the equipment on December 31, 2003 was $3,200,000. In its Statement of Cash Flows for the year ended December 31, 2004 Upward should include the following related to the above transaction: CFO CFF A) -$196,660 -$203,340 B) -$400,000 -$203,340 C) -$400,000 $0 D) -$196,660 $0 The correct answer was C) Upward’s lease is classified as an operating lease because it meets none of the four alternative criteria for classifying a lease as a capital lease: 1.
There is no title transfer at the end of the lease. 2.
There is no bargain purchase option.
3.
The lease period is not at least 75 percent of the asset’s life ((10 years / 15 years =) 67 percent).
4.
The present value of the lease payments using a 7 percent interest rate (which is the minimum of the lessee’s incremental borrowing rate (9 percent) or the rate implicit in the lease (7 percent)) is $2,809,433, which is less than 90 percent of the fair value of the asset (2,809,433 / $3,200,000 = 87.8 percent). All of the cash outflows from an operating lease are a reduction in cash flow from operations. | 
发表于 2008-4-22 10:32
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