The exam is 120 minutes. You will have an additional 15 minutes to print (if available), scan, and upload. If you submit after the allotted time, your exam will be considered late and may incur a late penalty. After you complete your exam, scan your solutions into one pdf file.  Please upload your completed exam file by clicking on the “Add File” button underneath Question 1’s blank answer field. Download exam file here : Midterm Exam 2 1. Open book and notes (textbooks, lecture notes only). 2. Usage of computers, mobile phones, and the Internet is not allowed (except for use of Honorlock) 3. A calculator is not allowed- no electronic communication on device.  If your exam utilizes Gradescope’s Student App, Do NOT upload to Gradescope.  You will only upload your scanned exam file to this D2L quiz 

What is the most ancient lineage of living seed plants (oldest living fossil)?

What amount will Tower record as a lease receivable on 1/1/2024 (determined before recording the first lease payment due that day)? If no lease receivable recognized, enter $0.

What amount will Pisa, Inc. recognize as a right-of-use asset at the lease inception?

What amount of interest revenue will Tower recognize for the 12 months ended 12/31/2024? If no interest revenue recognized, enter $0.

What amount of lease receivable will be reported on Tower’s 12/31/2024 balance sheet? If no lease receivable recognized, enter $0.

Facts for Question 8 On January 1, 2025, Metalcraft leases a machine from Capital Leasing for 10 years with an annual lease payment of $15,000. The first payment is due on January 1, 2025. The rate implicit in the lease (which is known to Metalcraft) is 10%.  The lease contract allows Metalcraft to terminate the lease after three years by paying an early termination penalty of $45,000. At the start of the lease, it is reasonably certain that Metalcraft will not terminate the lease early. The residual value of the machine at the end of the 10 year lease is estimated to be $5,000 and none is guaranteed by Metalcraft.   PV Annuity Due PV Ordinary Annuity PV Single Sum 10%, 3 periods 2.73554 2.48685 0.751315 10%, 10 periods 6.75902 6.14457 0.385543 What amount will Metalcraft recognize as a right-of-use asset at lease inception?

Describe a lessor’s accounting for a sales-type lease.

Describe a lessor’s accounting for an operating lease

Facts for Question 9 On January 1, 2025, Metalcraft leases a machine from Capital Leasing for 4 years with an annual lease payment of $15,000. The first payment is due on January 1, 2025. The rate implicit in the lease (which is known to Metalcraft) is 10%.  The estimated residual value of the equipment at the end of the lease is $100,000 and this amount is guaranteed by Metalcraft. Metalcraft believes the equipment will be worth at least $100,000 at the end of the lease.   PV Annuity Due PV Ordinary Annuity PV Single Sum 10%, 4 periods 3.48685 3.16987 0.683013 What amount will Metalcraft recognize as a right-of-use asset at lease inception?