Charter Corp. manufactures office equipment and supplies throughout the U.S. The company owns property, plant, and...

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Charter Corp. manufactures office equipment and supplies throughout the U.S. The company owns property, plant, and equipment and also enters into operating leases for certain facilities. The company's tax rate is 35%. Listed below is selected financial data for Charter and the company's operating lease disclosure. Property, Plant, & Equipment (net) Total Assets Common Shareholders' Equity Sales Cost of Goods Sold Depreciation Expense Interest Expense Net Income Year a. 2013 2014 2015 2016 2017 Beyond 2017 Charter Corp. Operating Lease Disclosure (amounts in thousands) 2012 $178,454 515,685 302,754 $986,258 693,857 Operating Lease Commitments at the end of 2012 $ 48,760 $45,678 $212,000 Reported Lease Commitments $ 25,239 $ 52,800 $78,924 84,253 124,581 2011 $162,369 424,545 298,564 $888,965 588,920 75,689 91,025 2010 $155,388 410,256 289,455 As an analyst you wish to restate Charter's operating leases into capital leases. Required: Using the information in the operating lease disclosure, and assuming that Charter has an incremental borrowing rate for secured debt of 8%, restate the operating leases into capital leases. Charter Corp. manufactures office equipment and supplies throughout the U.S. The company owns property, plant, and equipment and also enters into operating leases for certain facilities. The company's tax rate is 35%. Listed below is selected financial data for Charter and the company's operating lease disclosure. Property, Plant, & Equipment (net) Total Assets Common Shareholders' Equity Sales Cost of Goods Sold Depreciation Expense Interest Expense Net Income Year a. 2013 2014 2015 2016 2017 Beyond 2017 Charter Corp. Operating Lease Disclosure (amounts in thousands) 2012 $178,454 515,685 302,754 $986,258 693,857 Operating Lease Commitments at the end of 2012 $ 48,760 $45,678 $212,000 Reported Lease Commitments $ 25,239 $ 52,800 $78,924 84,253 124,581 2011 $162,369 424,545 298,564 $888,965 588,920 75,689 91,025 2010 $155,388 410,256 289,455 As an analyst you wish to restate Charter's operating leases into capital leases. Required: Using the information in the operating lease disclosure, and assuming that Charter has an incremental borrowing rate for secured debt of 8%, restate the operating leases into capital leases.

Answer rating: 100% (QA)

A Year 2013 2014 2015 Reported Lease Commitments 25239 52800 78924 ... View the full answer