Final answer:
The lessee reports cash payments for operating leases as cash flows from operating activities. The lessee reports cash payments for finance leases as cash flows from financing activities. The lessor reports cash receipts from a sales-type lease as cash inflows from operating activities.
Step-by-step explanation:
The correct options in this case are:
- The lessee reports cash payments for operating leases as cash flows from operating activities.
- The lessee reports cash payments for finance leases as cash flows from financing activities.
- The lessor reports cash receipts from a sales-type lease as cash inflows from operating activities.
When it comes to the impact of leases on the statement of cash flows, there are certain reporting guidelines to follow. The lessee, which is the party leasing the asset, reports cash payments for both operating leases and finance leases in different sections of the statement of cash flows. Cash payments for operating leases are reported as cash flows from operating activities. On the other hand, cash payments for finance leases, which are leases that transfer risks and rewards of ownership to the lessee, are reported as cash flows from financing activities.
As for the lessor, which is the party leasing out the asset, cash receipts from a sales-type lease are reported as cash inflows from operating activities. This type of lease occurs when the lease agreement acts as a form of sale, resulting in a profit or loss for the lessor.