E10-29. Analyzing and Interpreting Footnote on Operating and Capital Leases Verizon Communications Inc. provides the following footnote relating to adoption of the new lease accounting standards (Topic 842) in its 10-Q report for the quarter ended March 31, 2019. The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of Topic 842 were as follows: Rent expense for operating leases is recognized on a straight-line basis over the term of the lease and is included in either Cost of services or Selling, general and administrative expense in our condensed consolidated statements of income, based on the use of the facility on which rent is being paid. a. How will Verizon treat the right-of-use asset on the balance sheet during the life of the lease? b. Assume the right-of-use assets had a weighted average lease term of 12 years. Approximate the effect the operating leases had on Verizon's income statement in Q1 2019. c. The company decided to adopt the standard with a modified retrospective method and did not adjust numbers on the comparative balance sheet. What analysis challenges does this create? E10-29. Analyzing and Interpreting Footnote on Operating and Capital Leases Verizon Communications Inc. provides the following footnote relating to adoption of the new lease accounting standards (Topic 842) in its 10-Q report for the quarter ended March 31, 2019. The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of Topic 842 were as follows: Rent expense for operating leases is recognized on a straight-line basis over the term of the lease and is included in either Cost of services or Selling, general and administrative expense in our condensed consolidated statements of income, based on the use of the facility on which rent is being paid. a. How will Verizon treat the right-of-use asset on the balance sheet during the life of the lease? b. Assume the right-of-use assets had a weighted average lease term of 12 years. Approximate the effect the operating leases had on Verizon's income statement in Q1 2019. c. The company decided to adopt the standard with a modified retrospective method and did not adjust numbers on the comparative balance sheet. What analysis challenges does this create