State Corporation
Below Is a Note on Disclosure of Leases

question 55

Essay

State Corporation
Below is a note on Disclosure of Leases for the State Corporation.
The State Corporation leases office, warehouse and showroom space, retail stores and office equipment under operating leases, which expire no later than 2027. The Corporation normalizes fixed escalations in rental expense under its operating leases. Minimum annual rentals under non-cancelable operating leases, excluding operating cost escalations and contingent rental amounts based upon retail sales, are payable as follows:
Fiscal year ending March 31,
$$\begin{array} { ll } 2013&\$ 10,051,000 \\2014&11,121,000 \\2015&10,161,000 \\2016&9,063,000 \\2017&8,814,000 \\Thereafter&46,681,000\end{array}$$ Rent expense was $12,551,000; $8,911,000; and $5,768,000 for the years ended March 31, 2012, 2011, and 2010, respectively.
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Refer to the information provided for State Corporation. What are the two types of leases that a company can have? Describe each briefly.

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Definitions:

Picoeconomics

A branch of economic theory that explores the decision-making processes within an individual, particularly conflicts among different interests over time.

Future Benefits

Anticipated advantageous outcomes derived from current actions or investments.

Job Satisfaction

The level of contentment employees feel about their work, which can affect performance, productivity, and turnover.

Motivation

The general desire or willingness of someone to do something.