On 1 April 20X8 Hop entered a two-year lease agreement for a photocopier and on that date made a payment of £1,000. The second payment is due on 1 April 20X9 which is £2, 000. This has been classified as a 'low value asset. The £1,000 has been recorded as Dr Administration expenses, Cr Bank
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On 1 April 20X8 Hop entered a two-year lease agreement for a photocopier and on that date made a payment of £1,000. The second payment is due on 1 April 20X9 which is £2, 000. This has been classified as a 'low value asset. The £1,000 has been recorded as Dr Administration expenses, Cr Bank
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- On 1 January 2022 (the contract date), Furniture Ltd sold R1 200 000 worth offurniture to a new housing development in Centurion. Furniture Ltd immediatelycredited their sales revenue with the R1 200 000. Included in the sales contract, wasa complementary servicing arrangement in which Furniture Ltd would provide thecustomer with annual servicing of the furniture (in case of any breakages ormanufacturing faults) for a period of three years from the date of the contract.The normal selling price of the furniture without any annual servicing is R1 400 000.The normal price charged to customers for annual servicing is R14 000.REQUIRED:Calculate the amount of revenue that Furniture Ltd should recognise, for thefinancial year end of 30 June 2022, with respect to the transaction above.Ignore the time value of money and VAT.On 1 January 2012, Main Contractors Ltd leased a new machine from the Solvitol Finance Company. The following details were obtained from the lease agreement. The capital cost of the machine at 1 January 2012 was £50,000. Six half-yearly payments of £11,000 each are payable in advance, commencing 1 January 2012 in the primary term. Three annual payments of £100 are payable in the secondary term. Main Contractors Ltd has not yet decided if it will take advantage of the secondary term. The estimated useful life of the machine is five years, with a nil residual value. The estimated residual value after three years is £10,000 and, of this, 95% is accountable to Main Contractors Ltd. It is the policy of Main Contractors Ltd to use the straight line method of providing for depreciation. Using (a) the sum of the digits method and (b) the actuarial method, calculate the effect of this rental on the annual accounts of Main Contractors Ltd to 31 December for the relevant…Helpful plc is a finance company. It purchased computer equipment for R78 500 and leased it to Chatroom Ltd under a three year lease with three payments of R29 000 payable annually in advance. Chatroom Ltd agreed to also pay R830, which represented the cost of setting up the lease. What amount will be recognised in the Helpful pic balance sheet at the end of the first year? Select one: O a. R55 363 O b. R55 330 O c. R49 500 O d. R50 330
- AB leases 100 desk phones for use in one of its offices. The contract term states that there will be an annual rental payment of R9 000 for eight years. The lease arrangement begins on 1 July 20x0. As an incentive to AB, no payment is required in the first year. The desk phones are to be classified as low-value items.Prepare the correct debit or credit entry that would be required in Entity AB’s income statement for the year ended 30 June 20x1 in respect of the above transaction.On 1 January 2012, an IFl entered into an ljarah Muntahia Bittamleek contract with a customer. The asset was purchased lease term, the asset shal be transferred as a gitt. The terms of the contract are Annual rentals $110,000 Term of lease= 4 years Residual value of asset at end= $3,000 Cost of the asset= $380,000 What shall be the accounting entries in the books of IF for the years 2012 to 2015?On 1 January 20x2, TwitX Ltd (TXL) entered into a three-year non-cancellable lease agreement to lease a piece of equipment from TipTop Leasing Ltd (TTL). Lease rental of $12,000 per year are to be paid by TXL on 31 December of each of the three years, commencing 31 December 20x2. TXL guaranteed that the leased asset would have a residual value of $3,000 when the leased asset is reverted to the lessor at the end of the lease term on 31 December 20x4. TXL had no knowledge of the implicit rate used in the lease and its incremental borrowing rate was 10% per annum. TLL's rate of return is 8% per annum. The equipment was new on 1 January 20x2, had a fair market value of $35,000. The leased asset was expected to have an estimated useful life of four years and a residual value of $4,000. Required: (part 1) Compute, as required under FRS 116 Leases, the lease liability and right-of-use asset from the perspective of TXL as at 1 January 20x2. Present the amortization table showing the…
- Assume that on December 31, 2018, Stora Enso (FIN) signs a 10-year, non-cancelable lease agreement to lease a storage building from Sheffield Storage. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of €71,830 beginning on December 31, 2018. 2. The fair value of the building on December 31, 2018, is €525,176. 3. The building has an estimated economic life of 12 years, a guaranteed residual value of €10,000, and an expected residual value of €7,000. Stora Enso depreciates similar buildings using the straight-line method. 4. The lease is non-renewable. At the termination of the lease, the building reverts to the lessor.5. Stora Enso's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Stora Enso. 1. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2018, 2019, and 2020.…Your client bought investment property at 157 Kissing Point Rd, Dundas, NSW 2117 for $445,000 under a contract dated 01 May 1998. The contract provided for the payment of a deposit of $85,000 on that date, with the balance of $360,000 to be paid on the settlement on 15 May 1998. Your client paid a stamp duty of $10,500 on 30 May 1998. On 1 June 1998, he received an invoice for solicitor’s fees of $6,300, which he paid as part of the settlement process. He sold the property on 01 July 2018(the day the contracts were exchanged) for $730,000. He incurred costs of $1,500 in solicitor’s fees and $30,000 in agent’s commission. During the entire ownership period, the property was used for producing assessable income. Your client had the following expenses for this property: ✓ Council rates $5,800 (not claimed in the previous tax return) ✓ Land tax $7,700 (not claimed in the previous tax return) ✓ Maintenance $20,100 (not claimed in the previous tax return) ✓ Bank Interest…The Arcade Company entered into a 10 year lease under which it made payments of R26 720 annually in advance.Arcade's borrowing rate was 10% per annum. The present value of the land was R125 000 and that of the buildings wasR125 000. The value of the land at the end of 10 years was R167 500 and the value of the buildings was R32 500. The landwould be classified as_______.Select one:a.an accounting leaseb.a finance leasec.a financial leased.an operating lease
- Helpful plc is a finance company. It purchased computer equipment for R78 500 and leased it to Chatroom Ltd under a three year lease with three payments of R29 000 payable annually in advance. Chatroom Ltd agreed to pay R830, which represented the cost of setting up the lease. At the end of the first year, the balance sheet reported a balance of R55 363. The implicit rate of interest is 10%. What amount will be recognised in the Helpful plc income statement as interest in the second year? Select one: a. R5 536 b. R2 636 c. R830 d. R29 000On 1st January 2018, Global Drilling Ltd entered into a GHS22million contract for the construction of an office complex at Tema. The building was completed at the end of December 2018. During the period, thefollowing payments were made to the contractor:Payment date AmountGHS’m1 January 2018 2.0031 March 2018 6.0030 September 2018 12.0031 December 2018 2.0022.00Global Drilling’s borrowings as at its year end of 31st December 2018 were as follows: 10% 4-year Loan Note with simple interest payable annually, which relates specifically to the building project, loans outstanding at 31st December 2018 amounted to GHS7,000,000. Interest of GHS700,000 was incurred on these borrowings during the year, and interest income of GHS200,000 was earned on these funds while they were held in anticipation of payments. 12.5% Five-year Loan Note with simple interest payable annually; debt outstanding at 1st January 2018 amounted to GHS10,000,000 and remained unchanged during the year. 10% Five-year…Carsons Ltd entered into the following lease agreement on the 1 January 2020: To produce a new foiled Christmas product, a new printing and folding machine was leased and received on 1 January 2020. The plant is held within the main warehouse operated by the company and required a complex installation that was completed and settled on 1 January 2020 at a cost of £35,000. The new plant is to be leased for 7 years at an annual rental payment of £350,000, payable on 31 December of each year. To delay receipt of the plant until 1 January 2020, the lessor paid a £20,000 incentive to Carsons Ltd which was received on 1 January 2020. The implicit rate of the lease is 8%. Help show how the information can be accounted for and adjusted into the finacial statements according to IFRS
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