Taunton Manufacturing Inc. is a machine shop in Taunton Massachusetts. The firm recently leased a drill press for a 20-year term at payments of $9,000 per year payable at year-end. No residual value was assumed in the lease, which is clearly a financing lease. Taunton can borrow at 8%, and will depreciate the press straight line over 20 years. Shortly before the lease became effective Taunton?s balance sheet was as follows: Taunton Manufacturing Inc. Balance Sheet ($000) Current Assets $ 35 Current Liabilities $ 25 Fixed Assets 315 Long Term Debt 95 Total Assets $350 Equity 230 Total Debt & Equity $350 Answer the following questions working in whole dollars but present balance sheet accounts rounded to the nearest $1,000. a. Construct Taunton?s balance sheet showing the capitalized lease and the related lease obligation.
Paper#7120 | Written in 18-Jul-2015Price : $25