Question is this? PPL(lessee) entered into agreement with storage-4 Inc .. (lessor). for additional warehouse space starting on 1 January 2021. fair value of the warehouse is currently estimated at $1575000 and expected value of the warehouse on December 31,2030 is $130000 . Warehouse of this style and age is expected 15 years. Borrowing rate 6%. The term lease will be 10 years. Monthly lease payment $16000 with payments due on 1st day of each calendar month. first payment is due on January 1 2021 at the commencement of lease. at the end lessee wishes to purchase the leased warehouse $135000.complete the task in the excel task file pictures given below PPL follows ASPE for reporting purpose

ANSWER the given pictures where we put the answer there is a coloumn (B) here we put yes or no the given information in column (A) BY READING THE ABOVE QUESTION AND IN COLUMN (C )HERE WE PUT THE CONCOLUSION by FROM C3 ,C4 ,C5, FROM THE GIVEN PICTURES BELOW

4. Task 1 5 Using the information provided in Appendixes I and II, analyze the classification of the Storage-4-U lease using the criteria provided in the table below. 6 7 8 Instructions: In Column B, indicate whether each criterion in Column A is met by selecting "Yes" or "No" from the drop-down list. 10 In Column C, select the best rationale from the drop-down list to support your conclusion in Column B. 12 13 14 A B Criterion met? Rationale 15 16 1 Handbook guidance From the point of view of a lessee, a lease normally transfers substantially all of the benefits and risks of 2 ownership to the lessee when, at the inception of the lease, one or more of the following conditions are present: (a) There is reasonable assurance that the lessee will obtain ownership of the leased property by the end of the lease term. (b) The lease term is of such a duration that the lessee will receive substantially all of the economic benefits expected 4 to be derived from the use of the leased property over its life span. 17 18 (c) The lessor is assured of recovering the investment in the leased property 5 and of earning a return on the investment as a result of the lease agreement 19 C3 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The lease agreement includes a bargain purchase option. The lease agreement includes a transfer of ownership The lease agreement does not include a transfer of ownership to the lessee or a bargain purchase option. C4 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is more than 75% of the remaining useful life of the warehouse. The lease term is less than 75% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The lease agreement includes a transfer of ownership The lease agreement does not include a transfer of ownership. C5 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The present value of the minimum lease payments exceeds 90% of the fair value of the leased warehouse. The present value of the minimum lease payments exceeds 75% of the fair value of the warehouse. The present value of the minimum lease payments does not exceed 75% of the fair value of the warehouse. The present value of the minimum lease payments does not exceed 90% of the fair value of the warehouse. 4. Task 1 5 Using the information provided in Appendixes I and II, analyze the classification of the Storage-4-U lease using the criteria provided in the table below. 6 7 8 Instructions: In Column B, indicate whether each criterion in Column A is met by selecting "Yes" or "No" from the drop-down list. 10 In Column C, select the best rationale from the drop-down list to support your conclusion in Column B. 12 13 14 A B Criterion met? Rationale 15 16 1 Handbook guidance From the point of view of a lessee, a lease normally transfers substantially all of the benefits and risks of 2 ownership to the lessee when, at the inception of the lease, one or more of the following conditions are present: (a) There is reasonable assurance that the lessee will obtain ownership of the leased property by the end of the lease term. (b) The lease term is of such a duration that the lessee will receive substantially all of the economic benefits expected 4 to be derived from the use of the leased property over its life span. 17 18 (c) The lessor is assured of recovering the investment in the leased property 5 and of earning a return on the investment as a result of the lease agreement 19 C3 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The lease agreement includes a bargain purchase option. The lease agreement includes a transfer of ownership The lease agreement does not include a transfer of ownership to the lessee or a bargain purchase option. C4 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is more than 75% of the remaining useful life of the warehouse. The lease term is less than 75% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The lease agreement includes a transfer of ownership The lease agreement does not include a transfer of ownership. C5 drop-down options The lease term is more than 90% of the remaining useful life of the warehouse. The lease term is less than 90% of the remaining useful life of the warehouse. The present value of the minimum lease payments exceeds 90% of the fair value of the leased warehouse. The present value of the minimum lease payments exceeds 75% of the fair value of the warehouse. The present value of the minimum lease payments does not exceed 75% of the fair value of the warehouse. The present value of the minimum lease payments does not exceed 90% of the fair value of the warehouse