Reference no: EM13823446
Balance Sheet Reporting Issues
Crumple Car Rentals is planning to expand into the western part of the United States and needs to acquire approximately 400 additional automobiles for rental purposes. Because Crumple’s cash reserves were substantially depleted in replacing the bumpers on existing automobiles with new “fashion plate” bumpers, the expansion funds must be acquired through other means. Crumple’s management has identified three options:
Issue additional debt.
Create a wholly owned leasing subsidiary that would borrow the money with a guarantee for payment from Crumple. The subsidiary would then lease the cars to the parent.
Create a trust that would borrow the money with a guarantee for repayment from Crumple and lease the cars to it. In the event of liquidation, the residual value of the trust would go to the Historical Preservation Society of Pleasantville.
The acquisition price of the cars is approximately the same under all three alternatives.
Required
You have been asked to compare and contrast the three alternatives from the perspective of:
The impact on Crumple’s consolidated balance sheet.
Their legal ramifications.
a. The ability to control the maintenance, repair and replacement of automobiles.
b. You are to consider any alternatives that might be used in acquiring the required automobiles.
c. You are to select the preferred alternatives and show why the best choice is.
|
Impact the accumulated depreciation account
: If fair values are used and adjusted each balance sheet date, how do you think this will impact the accumulated depreciation account?
|
|
Net domestic product
: GDP is always greater than NDP (net domestic product) due to ___________.
|
|
Is producing automotive parts core business process for HMC
: Identify at least six reasons why companies choose to outsource a business process? Which of these reasons might Dick use to make his decision to outsource or to attempt BPR? Is producing automotive parts a "core" business process for HMC? Explain
|
|
Module 8 course orginzational behavior q
: Discussion Forum: Module 8 course orginzational behavior Q~Career activism is a concept that is gaining interest because it emphasizes managing your own development in organizations. What concepts introduced in this course are compatible with the car..
|
|
Balance sheet reporting issues
: Crumple Car Rentals is planning to expand into the western part of the United States and needs to acquire approximately 400 additional automobiles for rental purposes. Create a wholly owned leasing subsidiary that would borrow the money with a guaran..
|
|
Equal employment opportunity & hrm
: EQUAL EMPLOYMENT OPPORTUNITY & HRM Before you start this assignment, be sure that you are familiar with the following laws and their amendments: Americans with Disabilities Act
|
|
Could angela file for copyright protection
: What steps must Angela take to make sure the information qualifies as a "trade secret"? Could Angela file for "copyright protection'? Is there a "patent infringement on the part of the professor
|
|
Suggest that the different foods
: Of the 60 participants, 16 preferred cupcakes, 26 preferred candy bars, and 18 favored dried apricots. Do these scores suggest that the different foods are differentially preferred by people in general? (Use the .05 significance level.)
|
|
Bonds and agreed to make annual sinking fund deposits
: Ekman Company issued $1,500,000, 14-year bonds and agreed to make annual sinking fund deposits of $71,300. The deposits are made at the end of each year into an account paying 6% annual interest. What amount will be in the sinking fund at the end of ..
|