Discuss the potential effect of the operating leases

Reference no: EM131830776

Question: Suppose the Canadian National Railway Company's (CN) total assets in a recent year were $24,004 million and its total liabilities were $14,180 million. That year, CN reported operating lease commitments for its locomotives, freight cars, and equipment totaling $740 million. If these assets had been recorded as capital leases, assume that assets and liabilities would have risen by approximately $740 million.

(a) Calculate CN's debt to assets ratio, first using the figures reported, and then after increasing assets and liabilities for the unrecorded operating leases.

(b) Discuss the potential effect of these operating leases on your assessment of CN's solvency.

Reference no: EM131830776

Questions Cloud

What is the basic conceptual interpretation of the product : Under the interpretation of multiplication we are using, AxB always means A groups with B in each group, or alternatively stated, B things taken A times.

What is your prediction about ceo perks such as jets : Suppose that we tax CEO salaries very highly, as some are proposing in the United States. What is your prediction about CEO perks such as jets and in-house chef

Define an sql query that returns the movie id number : Define an SQL query that returns the movie id number and title of all movies that have an R rating.

How much a typical low-skilled worker would earn : Most companies do their high-skilled work during the day shift: The big meetings, the major deliveries, the crucial repair work-all get done during the day.

Discuss the potential effect of the operating leases : Calculate CN's debt to assets ratio, first using the figures reported, and then after increasing assets and liabilities for the unrecorded operating leases.

Why does the chairperson of the IASB argue : Explain why the chairperson of the IASB believes that the former accounting standard for leases did 'not reflect economic reality

Amortize bond discount using straight-line method : Alpine Company issues $2 million, 10-year, 7% bonds at 99, with interest payable on December 31. The straight-line method is used to amortize bond discount.

Something similar with multiplication problems : What are the limitations of the following two statements?

Describe the general organization of a relational database : Compare a database to a database management system. What is a database schema? Describe the general organization of a relational database.

User Account

All Pages