Use the Table for the Question(s) Below

question 2

Essay

Use the table for the question(s) below.
Luther Industries currently has the following balance sheet (in thousands of dollars):
Luther is about to add a new fleet of delivery trucks. The price of the fleet is $1.5 million.
-The CICA Handbook,Section 3065,provides specific criteria that distinguish an operating lease from a capital lease.The lease is treated as a capital lease for the lessee and must be listed on the firm's balance sheet if it satisfies any of the following conditions:

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Definitions:

Total Sales Revenues

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Total Costs

The sum of all costs associated with the production of goods or delivery of services, including both fixed and variable costs.

Cost-volume-profit Analysis

A financial management tool that helps in determining the effects of changes in costs and volume on a company's profits.

Fixed

Pertaining to costs or assets that do not fluctuate with changes in production level or business activity.