On december 31 2010 lopez co lessee signed a 3-year

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Reference no: EM13579044

On December 31, 2010, Lopez Co (lessee) signed a 3-year, non-cancelable lease for the use of manufacturing equipment now owned by Zinger Inc.The lease expires December 31, 2013 and has the following terms:

1. Annual contractual payments of $16,664 at the end of each year. The first payment is due December 31, 2010.

2. No down payment, No purchase option

3. The asset's FMV at 12/31/10 is $60,000.

4. Lopez does note guarantee any residual value at 12/31/13.

5. Lopez can borrow at 10% per year for a 3-year loan; Lopez is unaware of Zinger's 8% desired return rate.

6. The estimated useful life of the asset is 4 years.

Give Lopez's annual cash flow and income statement impacts, as well as the cumulative balance sheet impacts of this lease from 2010 to 2013. Round all answers to whole dollars.

Reference no: EM13579044

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