Operating and Capital Leases

question 51

Essay

Operating and capital leases
Berkeley Corporation wants to expand operations and is considering various leasing arrangements for additional equipment.Berkeley's management has heard the terms capital lease and operating lease mentioned by the accounting department and wants clarification of these terms before signing any lease contracts.
(a)Briefly explain the difference between a capital lease and an operating lease from a lessee's (Berkeley's)point of view.Your answer should include the financial statement impact of each type of lease.
(b)How does a lessee determine whether a specific lease contract is an operating lease or a capital lease? Include at least two of the criteria specified by the FASB in your answer.
(c)Which of the above two types of leases is sometimes

Explain the expectancy theory of motivation and its components (expectancy, instrumentality, valence).

Discuss managerial implications of motivation theories for effective employee motivation and performance.

Understand the defining characteristics and diagnostic criteria of various psychological disorders, including personality and dissociative disorders.

Recognize the impact of psychological disorders on individuals’ behavior and thought processes.

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Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts, including those for the sale of land or goods over a certain value, to be in writing to be enforceable.

Interest in Land

A legal right or claim on property, entitling the holder to a specific interest or portion of the property such as ownership, use, or occupancy.

Executor

A person named in a will or appointed by a court, who is responsible for ensuring that a deceased person's estate is distributed according to the will and laws.

Verbal Agreement

An agreement made through spoken words between parties that is legally binding, although harder to prove than written contracts.