• Document: CHAPTER 20 LEASES. MULTIPLE CHOICE Conceptual
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CHAPTER 20 LEASES MULTIPLE CHOICE—Conceptual Answer No. Description b 1. Essential element of a lease agreement. c 2. Identification of executory costs. d 3. Advantages of leasing. b 4. Current standards in lease accounting. c 5. ASPE capitalization criteria. d 6. Components of minimum lease payments. d 7. Interest/discount rate used by lessee. c 8. Identify incorrect statement. c 9. Lessee accounting for a capital (finance) lease. a 10. Depreciation of a leased asset by lessee. b 11. Effect on accounting of capital lease vs. operating lease. hz c 12. Objective of accounting for direct financing leases by lessor. d 13. Components of gross investment in lease. a 14. Recognition of unearned lease income. c 15. Accounting for a sales-type lease (manufacturer or dealer lease). d 16. Accounting for initial direct costs. c 17. Disclosing obligations under capital leases. zle d 18. Contract-based approach. c *19. Gain/loss recognition in a sale-leaseback. a *20. Classification of lease of land. MULTIPLE CHOICE—Computational Answer No. Description b 21. Calculate operating lease expense. d c 22. Calculate operating lease income/expense. d 23. Calculate operating lease expense with inducement. c 24. Calculate interest expense and depreciation expense for lessee. c 25. Calculate minimum annual lease payment. d 26. Calculate total annual lease payment. a 27. Identification of lease type for lessor. c 28. Identification of lease type for lessee. c 29. Calculate depreciation expense for lessee. b 30. Calculate gross profit and interest income for lessor. a 31. Calculate depreciation and interest expense for lessee. c 32. Calculate gross profit and interest income for lessor. a 33. Calculate income before taxes from operating lease. d 34. Calculate operating lease expense. b 35. Identification of lease type for lessee. a 36. Identification of lease type for lessor. Test Bank Chapter 20 Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited 20- 2 Test Bank for Intermediate Accounting, Ninth Canadian Edition MULTIPLE CHOICE—Computational (Continued) Answer No. Description d 37. Calculate lease payments receivable. Answer No. Description b 38. Expense recorded by lessee/operating lease. d 39. Revenues and expenses recorded by lessor/operating lease. c 40. Calculate reduction of lease obligation for lessee. b *41. Rent expense with sale-leaseback. b *42. Determine interest rate implicit in lease payments. a *43. Lease-related expenses recognized by lessee. d *44. Determine long-term lease obligation for lessee. b *45. Lease-related income in sale-leaseback. MULTIPLE CHOICE—CPA Adapted Answer No. Description hz a 46. Calculate the lease liability of a lessee. d 47. Calculate the lease liability of a lessee. d 48. Calculate interest expense for lessee. a 49. Calculate depreciation expense for lessee. a 50. Calculate income realized by lessor. c 51. Identification of lease type for lessee. zle a 52. Determine reduction of lease obligation for lessee. d *53. Reporting gain on a sale-leaseback. b *54. Accounting for deferred profit in a sale-leaseback. EXERCISES Item Description d E20-55 Types of lessors. E20-56 Accounting for a capital lease by the lessee. E20-57 Lease criteria under IFRS. E20-58 Lease criteria for classification by lessor under A

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