expires . What amount should Glen record as a capitalized leased asset at inception of the lease ?
Question 15
Scott Co . exchanged nonmonetary assets with Dale Co . No cash was exchanged . There is commercial substance to the exchange . The carrying amount of the asset surrendered by Scott exceeded both the fair value of the asset received and Dale ' s carrying amount of that asset . Scott should recognize the difference between the carrying amount of the asset it surrendered and
Question 16
Lease A does not contain a purchase option , but the lease term is equal to 90 percent of the estimated economic life of the leased property . Lease B does not transfer ownership of the property to the lessee by the end of the lease term , but the lease term is equal to 75 percent of the estimated economic life of the leased property . How should the lessee classify these leases ?
Question 17
On December 31 , 2005 , Bit Co . had capitalized costs for a new computer software product with an economic life of five years . Sales for 2006 were 30 percent of expected total sales of the software . At December 31 , 2006 , the software had a net realizable value equal to 90 percent of the capitalized cost . What percentage of the original capitalized cost should be reported as the net amount on Bit ' s December 31 , 2006 balance sheet ?
Question 18
On January 1 , 2001 , Babson , Inc . leased two automobiles for executive use . The lease requires Babson to make five annual payments of $ 13,000 beginning January 1 , 2001 . At the end of the lease term , December 31 , 2005 , Babson guarantees the residual value