For the Following Lease, Determine the Amount the ROU Asset

question 40

Multiple Choice

For the following lease, determine the amount the ROU asset will be initially measured at assuming that the company does not elect to use the practical expedient available to it.
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Annual payment (due at end of } \\\text { year) }\end{array} & \$ 22,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental borrowing rate } & 10 \% \\\hline \begin{array}{l}\text { Implicit rate (not readily } \\\text { determinable by lessee) }\end{array} & 8 \% \\\hline \begin{array}{l}\text { Non-lease costs included in } \\\text { annual payment }\end{array} & 5,000 \\\hline\end{array}$

• A)64,443
• B)67,876
• C)83,397
• D)87,840

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Definitions:

Strong Base

A substance that has a high capacity to accept protons (H+) and is completely or nearly completely ionized in aqueous solution.

Weak Base

A chemical species that partially accepts protons in solution, leading to an increase in the pH of the solution.

Calcium Hydroxide

A white crystalline compound with the formula Ca(OH)2, often used in the production of cement, plaster, and in water treatment.

Strong Base

A strong base is a substance that can completely dissociate into its ions in aqueous solution, resulting in a high pH.