DB 6 Research Paper Example | Topics and Well Written Essays - 750 words

DB 6 - Research Paper Example Deposits refer to clients’ money that are kept with the bank while borrowings are cash and cash equivalents that a banking institution may borrow from other sources such as other commercial banks and the Federal Bank (Union Bank, 2011). Liabilities of a magazine publisher, like those of a newspaper publisher, are however diverse and can be explored in terms of current liabilities and long term liabilities. Current liabilities of the form of business organization are creditors, accrued payroll, prepaid subscriptions, accrued expenses, and outstanding taxes. Portions of long term debts and lease liabilities that falls due in a given accounting period also form part of the publishers’ short term liabilities. Long-term liabilities for the form of business include â€Å"long term debt and capital lease obligations,† â€Å"pension benefits obligations,† â€Å"post retirement benefits obligations† among other long-term commitments (New York Times, 2012, p. 55). Current liabilities of a departmental store such as Macy’s departmental stores however include â€Å"short term debt,† â€Å"merchandise accounts payable,† â€Å"accounts payable and accrued liabilities,† â€Å"income taxes and differed income taxes† and outstanding taxes while long term liabilities are long term debts, outstanding taxes and other forms of long term liabilities (Macy’s, 2012, F-5). Borrowings and outstanding taxes are the common types of liabilities for the three forms of organizations while accounts payable, accrued expenses, accrued liabilities and long-term debts are common elements among magazine publishing organizations and departmental stores. Deposits are however unique for a banking institution while prepaid subscriptions are unique for a magazine publishing organization’s balance sheet and merchandise accounts payable is unique among departmental stores (Union Bank, ; New York Times, ; Macy’s, ). Project 2: A report for Alcenon’s management The Corporation leases a large percentage of its operational assets. The choice to make operating leases as opposed to capital lease has aimed at keeping lease debts out of the organization’s balance sheet in order to attain low debt rations in financial reports. Alcenon is currently negotiating a 10-year-lease on an asset whose anticipated useful life is 15 years. Terms of the lease requires ten annual lease payments at $ 20000 per year. The first installment is due at the beginning of the lease term and the value of the leased asset is $ 135180. There is no provision for transfer of title to the lessee and no provision for bargain purchase. Decision into accounting for the lease as an operating lease must however be based on accounting and legal provisions that the management must be informed of. This report explores relevant provisions to accounting for the lease and makes recommendations to the management. Accounting co ncepts for professional and legal regulation of accounting for asset lease differentiate between capital lease and operating lease and knowledge of the differences must be identified before the corporation classifies the lease. One of the factors that the management should consider is the lease duration relative to the asset’