Ruby's Cube Designers has a balance sheet with $216,332 in total assets, $26 987 in debt and $189345 in equity. The company is about to lease new computers for a 3-year term at a rate of 7.75%and annual payments of $11 018. The useful life of the computers is 5 years. and their purchase costis $37 755. The lessor retains ownership of the computers and the contract has a purchase option so that Ruby's may purchase the computers at the end of the lease at fair market value, estimated at $4000. On the company's balance sheet, what will the amount of total assets be on the day the leasecontract is signed?
A) $216 332
B) $247 066
C) $251 066
D) $220 332

Question

Quizplus · Accepted Answer

The lease is an operating lease, so the computers are not recorded as assets on the balance sheet. Therefore, the total assets remain unchanged at $216,332.

Ruby's Cube Designers Has a Balance Sheet with $216,332 in Total