a sale-leaseback transaction, the right-of-use asset is computed as: a. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset. b. Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. c. Lease liability multiplied

a sale-leaseback transaction, the right-of-use asset is computed as: a. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset. b. Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. c. Lease liability multiplied

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 12Q

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In a sale-leaseback transaction, the right-of-use asset is computed as: Group of answer choices Carrying value of the asset multiplied by the FV of rights retained by the lessee divided by fair value of the asset. Lease liability multiplied by useful life divided by total fair value of the asset. FV of rights retained by the lessee multiplied FV of the asset divided by carrying value of the asset. Rights retained by the lessor multiplied by rights retained by the lessee divided by FV of the asset.
The amount of gain (loss) on sale and leaseback transaction is: A. The difference of fair value and carrying of the underlying asset. B. The difference of the fair value of rights retained by the lessee and the carrying value of right-of use asset. C. The difference of the fair value of rights retained by the lessee and the carrying value of rights transferred to the lessor. D. The difference of the fair value of rights transferred to the lessor and carrying value of rights transferred to the lessor.
The amount of gain (loss) on sale and leaseback transaction is: Group of answer choices The difference of the fair value of rights retained by the lessee and the carrying value of right-of-use asset. The difference of the fair value of rights transferred to the lessor and carrying value of rights transferred to the lessor. The difference of fair value and carrying of the underlying asset. The difference of the fair value of rights retained by the lessee and the carrying value of rights transferred to the lessor.
What is the treatment of an unguaranteed residual value in determining thecost of sales under a sales type lease? A. The unguaranteeed residual value is ignored.B. The unguaranteed residual value is added to the cost the leased asset.C. The unguaranteed residual value is deducted from the cost of the leased asset at absolute amount.D. The unguaranteed residual value is deducted from the cost of the leased asset at present value.
The residual value is the estimated fair value of theleased property at the end of the lease term.(a) Of what significance is (1) an unguaranteed and (2) aguaranteed residual value in the lessee’s accountingfor a capitalized-lease transaction?(b) Of what significance is (1) an unguaranteed and (2) aguaranteed residual value in the lessor’s accountingfor a direct-financing lease transaction?
The initial direct cost is added to the cost of the asset to get the netinvestment in the lease which shall be spread over the lease term. Question: True or False
What is the treatment of unguaranteed residual value in determining the cost of sales under a sales type lease? It is deducted from the cost of leased asset at gross amount. It is ignored. It is deducted from the cost of leased asset at its present value. It is added to the cost of leased asset.
The cost of an asset purchased purchased under a finance lease will be equal to the carrying amount of the leased asset plus cash payment and the balance of the leased liability. True or False?
Explain how an entity would initially and subsequently measure its right-of-use asset and lease liability if the leased asset is classified as investment property under the fair value model? Assuming the fair value of the asset is not given at the end of the period, how will it be best computed? Compare and contrast the lease-related expenses if the entity uses the cost model and fair value model for its right-of-use asset.
If an entity as lessee presents as investment property a property interest held under an operating lease then the entity 1has the option of measuring some items of investment property using the cost model. 2shall measure in the financial statement all of its investment property using the fair value models 3shall measure that leased property interest under the fair value model and the remaining investment property using the cost model. 4shall measure that leased property interest under the cost model and the remaining investment property either using the cost model or the fair value model.
If there is a reasonable certainly that lessee will obtain ownership by the end of the lease term, the depreciation of the leased asset is based on the Useful life of the asset or lease term, whichever is longer Useful life of the asset or lease term, whichever is shorter Useful life of the asset Lease term
For a(n) ________ lease, a lessor recognizes revenue on the sale and records the asset, ________ lease. It also removes the leased asset from its accounts and records the ________. Group of answer choices sales-type; net investment in lease–sales-type; cost of goods sold finance; gross investment in lease–sales-type; cost of goods sold operating; net investment in lease–sales-type; cost of goods sold sales-type; finance; revenue