{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T02:59:29-04:00", "answer_date": "2024-06-28 02:59:29", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4226908", "url": "\/study-help\/questions\/research-case-151-fasb-codification-locate-and-extract-relevant-information-4226908", "question_creation_date_js": "2024-06-28T02:59:29-04:00", "question_creation_date": "Jun 28, 2024 02:59 AM", "meta_title": "[Solved] Research Case 15-1 FASB codification; loc | SolutionInn", "meta_description": "Answer of - Research Case 15-1 FASB codification; locate and extract relevant information and authoritative support for a financia | SolutionInn", "meta_keywords": "research,case,15-1,fasb,codification,locate,extract,relevant,information,authoritative,support,financial", "question_title_h1": "Research Case 15-1 FASB codification; locate and extract relevant information and authoritative support for a financial reporting issue; finance lease; sublease of a leased asset", "question_title": "Research Case 15-1 FASB codification; locate and extract relevant information and authoritative", "question_title_for_js_snippet": "Research Case 15 1 FASB codification locate and extract relevant information and authoritative support for a financial reporting issue finance lease sublease of a leased asset I don't see that in my intermediate accounting text I saved from college, you explain to another member of the accounting division of Dowell Chemical Corporation This will take some research Your comments pertain to the appropriate accounting treatment of a proposed sublease of warehouses Dowell has used for product storage Dowell leased the warehouses one year ago on December 31 The five year lease agreement called for Dowell to make quarterly lease payments of $2,398,303, payable each December 31, March 31, June 30, and September 30, with the first payment at the lease's beginning As a finance lease, Dowell had recorded the right of use asset and liability at $40 million, the present value of the lease payments at 8 Dowell records depreciation on a straight line basis at the end of each fiscal year Today, Jason True, Dowell's controller, explained a proposal to sublease the underused warehouses to American Tankers, Inc for the remaining four years of the lease term American Tankers would be substituted as lessee under the original lease agreement As the new lessee, it would become the primary obligor under the agreement, and Dowell would not be secondarily liable for fulfilling the obligations under the lease agreement Check on how we would need to account for this and get back to me, he had said Required 1 After the first full year under the warehouse lease, what is the balance in Dowell's lease liability An amortization schedule will be helpful in determining this amount 2 After the first full year under the warehouse lease, what is the carrying amount (after accumulated depreciation) of Dowell's leased warehouses 3 Obtain the relevant authoritative literature on accounting for derecognition of finance leases by lessees using the FASB's Codification Research System You might gain access from the FASB website (www fasb org), from your school library, or some other source Determine the appropriate accounting treatment for", "question_description": "\"image
\"image<\/div><\/div><\/div> Research Case 15-1 FASB codification; locate and extract relevant information and authoritative support for a financial reporting issue; finance lease; sublease of a leased asset \"I don't see that in my intermediate accounting text I saved from college,\" you explain to another member of the accounting division of Dowell Chemical Corporation. \"This will take some research.\" Your comments pertain to the appropriate accounting treatment of a proposed sublease of warehouses Dowell has used for product storage. Dowell leased the warehouses one year ago on December 31. The five-year lease agreement called for Dowell to make quarterly lease payments of $2,398,303, payable each December 31, March 31, June 30, and September 30, with the first payment at the lease's beginning. As a finance lease, Dowell had recorded the right-of-use asset and liability at $40 million, the present value of the lease payments at 8%. Dowell records depreciation on a straight-line basis at the end of each fiscal year. Today, Jason True, Dowell's controller, explained a proposal to sublease the underused warehouses to American Tankers, Inc. for the remaining four years of the lease term. American Tankers would be substituted as lessee under the original lease agreement. As the new lessee, it would become the primary obligor under the agreement, and Dowell would not be secondarily liable for fulfilling the obligations under the lease agreement. \"Check on how we would need to account for this and get back to me,\" he had said. Required: 1. After the first full year under the warehouse lease, what is the balance in Dowell's lease liability? An amortization schedule will be helpful in determining this amount. 2. After the first full year under the warehouse lease, what is the carrying amount (after accumulated depreciation) of Dowell's leased warehouses? 3. Obtain the relevant authoritative literature on accounting for derecognition of finance leases by lessees using the FASB's Codification Research System. You might gain access from the FASB website (www.fasb.org), from your school library, or some other source. Determine the appropriate accounting treatment for", "transcribed_text": "", "related_book": { "title": null, "isbn": null, "edition": null, "authors": null, "cover_image": null, "uri": null, "see_more_uri": "" }, "free_related_book": { "isbn": "1630475572", "uri": "\/textbooks\/the-money-queen-s-guide-for-women-who-want-to-build-wealth-and-banish-fear-1st-edition-978-1630475574-250525", "name": "The Money Queen S Guide For Women Who Want To Build Wealth And Banish Fear", "edition": "1st Edition" }, "question_posted": "2024-06-28 02:59:29", "see_more_questions_link": "\/study-help\/questions\/business-economics-2023-September-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/the-following-information-was-reported-by-three-companies-when-completing", "description": "The following information was reported by three companies. When completing the requirements, assume that any and all purchases on account are for inventory. Required: 1. What amount did each company...", "stars": 3 }, { "url": "\/study-help\/theory-of-probability\/consider-the-gamblers-ruin-problem-where-on-each-bet-the-1982895", "description": "Consider the gamblers ruin problem where on each bet the gambler either wins 1 with probability p or loses 1 with probability 1 p. The gambler will continue to play until his winnings are either N i...", "stars": 3 }, { "url": "\/you-collect-data-on-26-metropolitan-areas-to-analyze-average", "description": "You collect data on 26 metropolitan areas to analyze average monthly debt payments in terms of income and the unemployment rate. A portion of the data is shown in the accompanying table. a. Estimate...", "stars": 3 }, { "url": "\/study-help\/questions\/all-the-accounts-have-normal-balances-the-information-below-has-9834337", "description": "All the accounts have normal balances. The information below has been gathered at December 31,2022 . Interest will be paid when the note is repaid. 1. Carla Vista Company borrowed $9,400 by signing a...", "stars": 3 }, { "url": "\/study-help\/questions\/we-grow-is-going-public-with-a-perpetuity-that-offers-9478227", "description": "We grow is going public with a perpetuity that offers 150% of the $100 face. They will use an interest rate of 9% in the analysis. Managers anticipate that the recent slow-down in dot.com securities...", "stars": 3 }, { "url": "\/study-help\/questions\/walk-talk-inc-makes-walkie-talkies-handheld-portable-1035065", "description": "Walk & Talk Inc. makes walkie talkies - handheld, portable, two-way radio transceivers. They are used in setting where mobile phone communication may be costly or impractical, including outdoor...", "stars": 3 }, { "url": "\/study-help\/questions\/question-17-assume-that-a-firm-has-ebit-of-15584650-1056990", "description": "Question 17 Assume that a firm has EBIT of $15,584,650, a tax rate of 40.0 percent, total invested capital of $68,600,000, and a weighted average cost of capital (WACC) of 12.904 percent. Given this...", "stars": 3 }, { "url": "\/study-help\/questions\/how-do-the-following-situations-illustrate-the-features-of-psychological-1025441", "description": "How do the following situations illustrate the features of psychological egoism and\/or ethical egoism, or how do they illustrate the limitations and challenges to psychological egoism and ethical...", "stars": 3 }, { "url": "\/study-help\/questions\/differentiate-the-function-x-1-1050455", "description": "differentiate the function ( x + 1 ) \/ ( x ^ 3 + x - 6 )", "stars": 3 }, { "url": "\/study-help\/questions\/for-a-voltage-v210-sin-170xt-find-the-rootmeansquare-voltage-995970", "description": "For a voltage V-210 sin 170xt, find the root-mean-square voltage for one period. Vrms = (Round to the nearest integer as needed.)", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/the-following-information-is-available-for-avalon-company-for-2011-4226907", "next": "\/study-help\/questions\/if-a-company-pays-a-12month-insurance-premium-for-48000-4226909" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Research Case 15-1 FASB codification; locate and extract relevant information and authoritative", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/research-case-151-fasb-codification-locate-and-extract-relevant-information-4226908" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }e-151-fasb-codification-locate-and-extract-relevant-information-4226908" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }