15) AMR Corp. disclosed the following lease information in its 2011 annual repor
ID: 2647980 • Letter: 1
Question
15) AMR Corp. disclosed the following lease information in its 2011 annual report related to its leasing activities (in millions).
Capital
Leases
Operating Leases
2012
$ 167
$ 1,176
2013
149
1,091
2014
129
942
2015
118
779
2016
78
685
Thereafter
477
5,940
Total
1,118
$10,613
Amount representing interest
(439)
Present value of net minimum lease payments
$ 679
a. What did AMR report on its 2011 balance sheet related to leases?
b. Calculate the lease-related liabilities that are potentially missing from AMR
Capital
Leases
Operating Leases
2012
$ 167
$ 1,176
2013
149
1,091
2014
129
942
2015
118
779
2016
78
685
Thereafter
477
5,940
Total
1,118
$10,613
Amount representing interest
(439)
Present value of net minimum lease payments
$ 679
Explanation / Answer
AMR will show the amount of capital lease in its balance sheet ( exclusing any interest thereon). Therefore, it will show a liability of $679 million for capital leases.
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