Year 2 IRAC issues summary on Assess accounting for lease on building (right of use asset)

Year 2 Check figures:

Balance Sheet

Allowance for D/A $19,500

Operating Lease- Building: $288,537

Current deferred income tax asset $11,174

Total net PP&E $223,833

Interest payable $11,440

Income taxes payable $70,187

Operating lease payable, long term: $249,537

Total Liabilities & Equity $1,017,599

Income Statement

COGS $633,279

Depr and amort $47,967

Net income, after taxes $233,032

EPS: Weighted avg shares outstanding 15,000

Cash Flows:

Net cash from operations $342,378

Net cash from financing $208,000

Disclosures in Notes to F/S's:

1) Summary of Significant Accounting Policies

2) Notes payable

3) Leases and Other Commitments

4) Income Taxes

5) Fair value of financial instruments

6) Information about major customers

7) Reconciliation of Net Income to Net Cash Flows from Operating Activities (this is needed ONLY IF the cash flow statement was done with the direct method)