6. Rankin Ltd has entered into an agreement to lease an item of equipment that produces teddy bears. The terms of the lease are as follows: . • Date of entering lease: 1 July 2023. • Duration of lease: 10 years. • Life of leased asset: 10 years. . There is no residual value. • Lease payments: $5000 at lease inception, $5500 on 30 June each year (that is, 10 payments). • Included within the lease payments are executory costs of $500. • Fair value of the machine at lease inception: $27 470. REQUIRED Determine the interest rate implicit in the lease...
Q: Lunox Corporation is composed of two major subunits: Wholesale and Retail. In December, Retail…
A: Calculations of profit for each segment Formula- sales revenue (-) variable costs (-) traceable…
Q: The cost of a computer purchased two years ago is considered as sunk cost. Select one: O True O…
A: Sunk costs are those costs which are incurred in past and will not affect future decision making.…
Q: er type of account name for gift card lia
A: Gift card liability refers to the concept that reflects that the company has the obligation to…
Q: The Statement of Cash Flows is prepared instead of the Retained Earnings Statement. Group of answer…
A: Retained Earnings - Retained Earnings is the statement that shows the profit earned by the company…
Q: Vernon Publications established the following standard price and costs for a hardcover picture book…
A: Introduction:- A budget is an estimation of revenue and expenses over a defined period of time.
Q: How much is the book value per preference share assuming that preference shares are non-cumulative?
A: Book value per share refers to the ratio of total value available for preference shareholder and…
Q: Cash Accounts receivable Equipment Accounts payable Common stock $12,000 5,900 7,900 4,260 19,640…
A: Introduction: Income statement: All revenues and expenses items are shown in income statement. It…
Q: The total cost of direct material, direct labor, and manufacturing overhead transferred from…
A: Inventory- The things that a business keeps on hand in order to make money are referred to as…
Q: 9 6 7 8 5 4 3 Question # 1 2 For each item above, indicate whether the cost is MAINLY fixed or…
A: The cost can be classified based on nature like fixed costs or variable costs. The cost is variable…
Q: Compute the predetermined variable overhead rate and the predetermined fixed overhead rate Stevens…
A: Budgeted direct labor hours : =125,000 * 1 =125,000 hours Budgeted variable overhead given =437,500…
Q: Jasin Company projected operating income (based on sales of 450,000 units) for the coming year as…
A: Solution 1: Contribution margin ration is the proportion of contribution margin to sales. Same is…
Q: When preparing the Statement of Cash Flow using the indirect method for the current year, which of…
A: Cash Flow Statement: A cash flow statement is a kind of financial statement that offers aggregate…
Q: Compute the issue price of the bonds of Pluto corp issues P560,000 of 9% bonds, due in 9 years, with…
A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…
Q: Prepare a cash budget per month for the third quarter
A: Cash budget is the budget which is prepared by the company so that it can be estimated about the…
Q: Refer to the original data. Rather than purchase new equipment, the marketing manager argues that…
A:
Q: 6. China Airlines Inc., a resident foreign corporation, has the following data for the taxable year…
A: Income Tax Payable shall be only for passenger and cargo airfare where the point of origin is the…
Q: Accounting for assets question. 2. a) The following information we got from Waridi mean traders for…
A: As per our guidelines, only 1 question can be answered. So here is the solution for question 2(a)…
Q: For each of the transactions in items 2 through 5, indicate the two (or more) effects on the…
A: Accounting Equation: According to the accounting equation, the total assets of a corporation are…
Q: Forrester Company is considering buying new equipment that would increase monthly fixed costs from…
A: Contribution margin = Sales price (-) variable cost Contribution margin ratio = Contribution…
Q: Analyze the following:
A: Financial statements are the statements of the business, that cover every aspect of the business and…
Q: During December, Moulding Corporation incurred $76,000 of actual Manufacturing Overtlead costs.…
A: Under applied (over applied) manufacturing overhead costs = Actual manufacturing overhead costs -…
Q: Q2 Lautaro & Lukaku's provided the following accounting information for 2021: Jan. 1, 2021 Dec 31,…
A: Cost of goods sold = Opening finished goods + Cost of goods manufactured in the current period -…
Q: Solaris Company Limited , makers of solar water heaters, uses a perpetual inventory system. The…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: The interest earned in 6 years on Php 400,000 deposited in an account paying 9% interest, compounded…
A: Lets understand the basics. For answering this question, we need to check how much amount will be…
Q: Chavez Company most recently reconciled its bank statement and book balances of cash on August 31…
A: INTRODUCTION: Reconciliation is an accounting procedure that analyses two sets of records to ensure…
Q: Requirement 1. Prepare Carlson Software Corp.'s statement of cash flows using the indirect method to…
A: Cash flows statement is one of the financial statement which shows all cash inflows and cash…
Q: Construct a material usage and purchases budget of the Bara Enterprise.
A: A material usage and purchases budget is a statement of estimation of a material required to produce…
Q: What is the number of days’ sales in receivables? Round to one decimal place. Group of answer…
A: Number of days' in receivables Days Sales Outstanding (DSO) represents the average number of days it…
Q: S The following balances were extracted from the books of Zee Zee Trading, a retailer, on 30…
A: The statement of financial position and financial performance depicts the state of affairs and…
Q: 8 Capital (Drawings 00 Trade Receivables and Trade Payables Sales Revenue Cost of sales Wages…
A: A statement of financial performance is a statement that reflects all the income, revenue, and…
Q: On May 1, 2020 Setup Inc, sold an issue of 5%, 1000 bonds dated January 1, 2020, to yield 5%. The…
A: Bonds are an obligation on the entity. These are issued for raising funds from the market. The…
Q: 3. Norte De University, a proprietary educational institution, has the following selected…
A: a. Computation of income tax payable assuming the university opted to claim the cost of construction…
Q: A theoretical measure does of income does not exist in the real world in which accountant must…
A: The theoretically correct measure of the income refers to the firm net income which determined on…
Q: Cc stores is registered with vat Uses the perpetual inventory system. The following transactions…
A: Perpetual inventory system is one of the inventory system under which all transactions related to…
Q: 38 Use the following data to compute total factory overhead costs for the month: Sales commissions…
A: Solution:- Amount ($) Indirect Material 16,500 Factory Utilities 10,300 Indirect Labor…
Q: March 1 Invested OMR 10,000 as capital March 3 Purchased office furniture for OMR 3,000 from Blossom…
A: Introduction: Journals: All the business transactions are to be recorded in Journals. Journals are…
Q: Identify which from the following scenarios depict relevant cash flows in making the decision…
A: While making decision for accepting two alternatives, we always consider relevant cost and relevant…
Q: used for the prior five years-see Analys me statement, identify with numbers the a isposal on se ne…
A: Income statement (IS) is the statement which states the position at the end of the fiscal year or…
Q: arious options are provided as possible answers to the following questions. Choose the answer and…
A: Equity- Share capital and equity finance are other names for equity capital. It is referred to as…
Q: Jasin Company projected operating income ( based on sales of 450,000 units ) for the coming year as…
A: Break-even is the point wherein the entity is in a situation of a no profit and no loss. The entity…
Q: assumption supports the method used. In incorrect, identity which principle of assumption has been…
A: Accounting principles or assumptions means those concepts, rules and guidelines which will be…
Q: 3. REQUIRED (a) One-fifth of loan due on 30 June 2020. (b) Prepare the statement of financial…
A: Statement of financial position is also known as balance sheet, which shows all assets, all…
Q: Q1 For each case below, drag & drop the correct missing amount. Raw material used Direct Labor Total…
A: Introduction: Cost of goods manufactured is the total costs of goods manufactured during a specified…
Q: What is the reduction in total par value of shares to fully eliminate the deficit?
A: Quasi-reorganization was approved by the directors and the shareholders as the company was…
Q: The manager of the Bank of Mount Royal just phoned Daniel and offered the company same-day deposit…
A: 1. Net 30 is a trade credit policy under which payments should be due 30 days after the…
Q: Using the allowance method of accounting for uncollectible receivables. Transactions: April 1…
A: Journal Entries - Journal Entries are the primary method of recording transaction into debit and…
Q: G. From the following particulars, you are required to find out the errors in cash book and bank…
A: A bank reconciliation statement compares an entity's bank account to its financial records and…
Q: Required: 1. Prepare the bank reconciliation for this company as of July 31. Bank statement balance…
A: Introduction: When at the end of the particular period, cash balance and bank balance do not match,…
Q: Units 100 50 80 Beginning inventory Purchase (April 3) Sale (April 10) Purchase (April 18) Purchase…
A: LIFO is last in first out inventory valuation method which says that inventory which is purchased…
Q: Required: Monson sells 30 units for $35 each on December 15. Monson uses a perpetual inventory…
A: In the context of the given question, we are required to compute the cost of ending inventory.…
Step by step
Solved in 2 steps
- 11. On 1 July 2020, Sami Ltd leased a machine from Jimmy Ltd. The machine cost Jimmy Ltd OMR1,300,000 to manufacture and had a fair value of OMR1,541,090 on 1 July 2020. The lease agreement contained the following provisions: Lease term |4 years |Annual rental payment, in advance on 1 July each year OMR 415,000| Residual value at end of the lease term Residual guaranteed by lessee Interest rate implicit in lease The lease is cancellable only with the permission of the lessor. OMR 150,000 nil 8% The expected useful life of the machine is 6 years. Sami Ltd intends to return the machine to the lessor at the end of the lease term. Included in the annual rental payment is an amount of OMR15,000 to cover the costs of maintenance and insurance paid for by the lessor. Required A. Prepare the lease payment schedule for the lessee (show all workings); and B. Prepare the lease receipt schedule for the lessor (show all workings)ABC Ltd has entered into an agreement to lease an item of equipment that produces teddy bears. The terms of the lease are as follows: Date of entering lease: 1 July 2023. Duration of lease: 10 years. Life of leased asset: 10 years. There is no residual value. Lease payments: $5000 at lease inception, $5500 on 30 June each year (that is, 10 payments). Included within the lease payments are executory costs of $500. Fair value of the machine at lease inception: $27 470. find out the interest rate implicit in the lease with the above details.ABC Ltd has entered into an agreement to lease an item of equipment that produces teddy bears. The terms of the lease are as follows: Date of entering lease: 1 July 2023. Duration of lease: 10 years. Life of leased asset: 10 years. There is no residual value. Lease payments: $5000 at lease inception, $5500 on 30 June each year (that is, 10 payments). Included within the lease payments are executory costs of $500. Fair value of the machine at lease inception: $27 470.
- On 1 July 2022, Moose Ltd leased a plastic-moulding machine from Wolf Ltd. On 1 July 2022 the machine was in the records of Wolf Ltd at its fair value of $75 000. The lease agreement contained the following provisions. Lease term 4 years Annual rental payment, in advance on 1 July each year $20 750 Residual value at end of the lease term $7 000 Residual guaranteed by lessee $4 000 Interest rate implicit in lease 8% The machine will be depreciated by Moose Ltd on a straight-line basis. The expected useful life of the machine is 5 years. Moose Ltd intends to return the machine to the Wolf Ltd at the end of the lease term. The lease has been classified as a finance lease by Wolf Ltd. Included in the annual rental payment is an amount of $750 to cover the costs of maintenance and insurance paid for by the lessor. Initial direct costs for setting up the lease were incurred by both parties: $1 518 for Moose Ltd and $1 687 for Wolf Ltd. Required: Prepare…On 1 July 2020, Andrew Ltd enters into a 5-year agreement to lease an item of machinery from Josh Ltd. Andrew Ltd incurred costs of $4 500 in setting up the lease agreement. The machinery has a fair value of $450 000 at the inception of the lease and it is expected to have an economic life of 6 years, after which time it will have a residual value of $35 000. The lease agreement details are as follows: Length of lease 5years Commencement date 1 July 2020 Annual lease payment, payable 30 June each year commencing 30 June 2021 $95,000 Residual value at the end of the lease term $80,000 Residual value guarantee by Andrew Ltd $50,000 Interest rate implicit in the lease 10% The lease is cancellable without any penalties All insurance and maintenance costs are paid by Josh Ltd and are expected to amount to $15 000 per year and will be reimbursed by Andrew Ltd by being included in the annual lease payment of $95 000. The machinery will be…On 1 March 2020,the company entered into a lease agreement in order to lease a manufacturing machine with a costprice of R250 000 (VAT inclusive). The period of the lease is five years, and the useful life of the machinery is estimatedat six years. The following is an extract from the lease agreement:4.1.1 Ownership of the machinery will be transferred to the Lessee at the end of the lease.4.1.2 Should the Lessee cancel the lease, the Lessor’s losses will be borne by the Lessee.Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used themanufacturing machine for a qualifying purpose. The company is a registered VAT vendor.Required:Provide the deferred tax movement per the balance sheet method for the lease agreement for the financial year ending31 December 2021. Clearly indicate whether the movement represents an income or an expense. Note:- Show all calculations, marks are awarded for calculations.- You may round off to the nearest Rand.
- On 1 July 2020, Cooper Ltd leased a plastic-moulding machine from Jersey City Ltd. The machine cost Jersey City Ltd $260,000 to manufacture and had a fair value of $302,035 on 1 July 2020. The lease agreement contained the following provisions: Lease term 4 years Annual rental payment, in advance on 1 July each year $81,500 Residual value at end of the lease term $30,000 Residual guaranteed by lessee nil Interest rate implicit in lease 8% The lease is cancellable only with the permission of the lessor. The expected useful life of the machine is 6 years. Cooper Ltd intends to return the machine to the lessor at the end of the lease term. Included in the annual rental payment is an amount of $1500 to cover the costs of maintenance and insurance paid for by the lessor. Instructions: a)Explain why the lease should be classified as a finance lease by both lessee and lessor based on the guidance provided in Accounting standard. b) Prepare the lease payment schedule for the lessee (show…Identify the differences between a Finance Lease and an Operating Lease 5.2. hijk Ltd leases an asset as a lessee. The lease agreement is for 6 years. Lease instalments of R145 545 made at the beginning of the period and interest rate is 9%. The commencement of the lease is 1 April 2021. Asset is depreciated over 4 years. The tax rate is 28%. Lease payments are allowed as a deduction when paid. Profit before tax is R600 000 Journalise the transactions for the year ended 31 December 2021 (Journal narrations are required)INSTRUCTION: This section consists of TWO (2) structured question. Answer ALL questions. QUESTION 1 On 1 January 2020, Bliss Bhd signed a non-cancellable lease contract to lease a machine for a lease term of three years. Annual lease payment of RM60,000 payable in arrears at the end of each year. At the commencement date of the lease, the interest rate implicit in the lease at 5% per annum. Fees in relation to the preparation of lease contract amounted to RM4,605. Present value of lease payments amounted to RM163,395. The company closes its accounts on 31 December each year. Required: Fill in the following lease liability table with correct figures from 2020 to 2022 (round up the interest expense to the nearest RM). (a) Carrying Carrying Interest Instalment amount b/f (RM) Years amount c/f (RM) (RM) (RM) 2020 2021 2022 (b) Prepare the journal entries to record the initial measurement, interest charge, instalment payment and depreciation of right of use asset in the financial year 2020…
- 19. On January 2, 2022, Sylvester Metals Co. leased a mining machine from EDH Leasing Corp. Assume the lease qualifies as an operating lease under ASPE standards. The annual payments are $4,000 paid at the end of each year, and the life of the lease is 10 years. What entry would Sylvester make when the machine is delivered by EDH? a. Leased Assets40,000 Lease Liability40,000 b. Leased Assets40,000 Prepaid Rent40,000 c.No entry is necessary. d. Prepaid Rent40,000 Lease Liability40,000On 1 July 2020, Table Ltd leased equipment from Chair Ltd. The following are details of the equipment and the lease contract: On 1 July 2020 equipment has a fair value of $110,000 (at fair value in Chair Ltd’s accounts) Lease term is 5 years, useful life of the equipment is 6 years, and Table Ltd will return the equipment at the end of the lease term Lease payments are in advance and will be paid on 1 July of each year, starting 1 July 2020, with $24,000 as the annual payment Residual value of the equipment at the end of the lease term is $8,000, with Table Ltd guaranteeing 75% of the residual value The interest rate implicit in the lease arrangement is 6%. In setting up the lease arrangement Table Ltd incurred costs of $2,354, while Chair Ltd incurred costs of $3,141. Required: a) Prepare the necessary journal entries for Table Ltd on 1 July 2020. b) Calculate interest and depreciation expense incurred on 30 June…19 On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $125,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,214,031 lease liability. Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)