Speedware Corporation:

A friend of yours reviewed the $2015$ Annual Report for Speedware Corporation. The following are extracts from the Report.

$7.$ Finance Subsidiaries $($continued$)$

At December $31,2015,$ receivables of $$898$ included $$595$ of notes and accounts receivable and $$303$ due under non$-$cancelable leases, maturing as follows:

Year ended Dec $31$:

$2016$: Lease receivables $($$millions$)$: $159$; total receivables: $357$

Years $2-5$: Lease receivables $($$millions$)$: $190$; total receivables: $535$

Thereafter: Lease receivables $($$millions$)$: $15$; total receivables: $67$

Total: Lease receivables $($$millions$)$: $364$; total receivables: $959$

Less unearned income: Lease receivables $($$millions$)$: $(61)$; total receivables: $(61)$

Total: Lease receivables $($$millions$)$: $303$; total receivables: $898$

$18.$ Commitments

At December $31,2015,$ the future minimum lease payments under finance leases and operating leases consisted of:

Year ended December $31$:

$2016$: Finance Leases: $5,$ Operating Leases: $132$

Years $2-5$: Finance Leases: $14,$ Operating Leases: $290$

Thereafter: Finance Leases: $9,$ Operating Leases: $154$

Total future minimum lease payments: Finance Leases: $28,$ Operating Leases: $576$

Less imputed interest: Finance Leases: $8,$ Operating Leases: $0$

Present value of net minimum lease payments: Finance leases: $20$; Operating leases: $0$

Rental expense on operating leases for the years ended Deember $31,2015,2014,2013,$ amounted to $$172,$ $$170,$ $$131,$ respectively.

Your friend has asked you the following questions about the annual report:

Required: Prepare a brief memorandum answering the questions for your friend:

a$.$ Is the firm a lessee or lessor?

b$.$ Where would the liabilities appear on the statement of financial position, and in what amounts?

c$.$ Does Dpeedware Corporation have any operating leases? How do you know? How are the payments accounted for by the firm?

d$.$ What entried would Speedware Corporation make to account for its leases during $2016,$ based on those leases currently on the books? $($Ignore any executory costs.$)$ In other words, based on the information provided, you will not be able to determine interest costs, financing costs, or depreciation.