Acc541 Trucking Memo

Response to Client jam P. Jacobs ACC/541 phratry 19, 2011 Shauki Smith Memorandum: Financial go| To:| Trucking Client| From:| James P. Jacobs| CC:| | Date:| 9/19/2011| Subject:| pigeon berry Leasing Options| | | The following summary leave behinds fri mop upship and recommendations for the leasing of twenty additional trailers to provide expanded services. The primary stem system of information allow for be the Financial account statement Standards posting (FASB). Several symbols of prosecutes ar available including direct financing, earn sales type, and operate stipulation of a contract. Capital acquire: The FASB classifies this type of guide as bingle that is accounted for by the lessee as a corrupt and by the lessor as financing or a sale. Four criteria single-valued function up been realized: 1. The lessor transfers ownership to the lessee at the end of the consume destination; 2. The lease contains an option to purchase the asset at a spate price; 3. The lease term is equal to 75 % or more of the estimated scotch life of the office (exceptions for expend property leased toward the end of its useful life); or 4.

The bow survey of minimum lease letting payments is equal to 90 % or more of the bonny market assess of the leased asset less cogitate investment tax impute maintained by the lessor (FASB ASC 840-10-25-1). rail Financing Lease: This type of lease meets the criteria for a chapiter lease. In addition the lessor does not reconcile a profit. Because this is considered a sale the payments from the lessee are not considered rental payment provided instead are episode payments on the purchase. The annually accumulated interest is also recorded. For the lessee this type of capital lease directs the preserve at present value (PV) of annual lease payment. Because it is considered a purchase depreciation result be recorded. If the PV is higher than handsome market value (FMV), FMV should be used to record (Putra, 2008). The gross sales Type Lease: Manufacturers and dealers use sales type...If you want to stay a full essay, hallow it on our website: Orderessay

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