Delta Airlines leases most of its commercial aircraft and is currently committed to pay almost $13 billion
Question:
Delta's recent balance sheet reports assets totaling $54,121 million. The company's long-term debt, including its capital lease obligations, total approximately $28,429 million.
Instructions
a. If Delta had structured its aircraft commitments as capital leases instead of operating leases, how would the appearance and potential interpretation of its balance sheet have changed?
b. Is it ethical for Delta to structure less than $291 million of its aircraft commitments as capital leases and the remaining as off-balance sheet financing? Defend your answer.
c. With regard to Delta's lease obligations, why is it important for investors and creditors to read and understand the footnotes accompanying the airline's financial statements?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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