Question

Cineplex Inc. is the largest motion picture exhibitor in Canada and owns, leases, or has joint-venture interests in over 161 theatres with 1,630 screens. Exhibits 10-12A and B contain Notes 18 and 25 from the company’s 2013 annual report detailing Cineplex’s lease arrangements.
Required:
a. Read Note 18 in Exhibit 10-12A and explain, in your own words, how Cineplex accounts for the theatres and theatre equipment under finance leases. Be sure to discuss the impacts, if any, that this treatment would have on the company’s statement of financial position and statement of income.
b. After reading Note 25, consider where Cineplex operates its theatres, perhaps thinking about a theatre in your own city. Explain why it is reasonable that most of the company’s leases would be operating leases rather than finance leases.
c. Explain, in your own words, how Cineplex accounts for leases. Be sure to discuss the impacts, if any, that this treatment would have on the company’s statement of financial position and statement of income.


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  • CreatedJune 12, 2015
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