Answered: a. If the sales price is P1,000,000…

a. If the sales price is P1,000,000 which is equal to fair value compute the following under the seller-lessee accounting i. Lease liability ii. Right of use Asset iii. Gain or Loss

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

6. Entity X sells a building to Entity Y and simultaneously leases Sale and leaseback 6. Entity X sells a building to Entity Y and simultaneously it back. Relevant information follows: P2,000,00 Cash selling price of building Fair,value of building Carrying amount of building Annual rent payable at the end of each year 1,800,00 1,000,00 120,000 18 years Lease term 4.5% Implicit interest rate (readily determinable to Entity X) The terms and conditions of the transaction are such that the transfer of the building qualifies as a sale under PFRS 15. Requirements: Prepare the journal entries in the books of Entity X (seller-lessee) and Entity Y (buyer-lessor) on lease commencement. (Adapted - IFRS 16. IE11)
O e. $300,000 Jestion 3 For an operating lease, which statement is TRUE? ot yet swered Select one: ints out of O a. The Right of Use asset amortization amount will decrease each year. O b. Annual Lease Expense will be the amortization of the Right of Use asset less that year's interest expense. Flag question Oc. The recorded Lease Expense amount will be the same each year. O d. The annual amortization of the Right of Use asset will be debited to Amortization Expense each year. O e. To compute the cost of the Right of Use asset, the lessee will use the incremental rate, if known. estion 4 Indicate the type of Deferred Tax account created by Unearned Revenues and Accrued Revenues, respectively: yet wered Select one: nts out of O a. Asset, Asset O b. Liability, Asset O c.Asset, Liability O d. Liability, Liability Flag question stion 5 Which of the following requires intraperiod tax allocation? yet wered Select one: nts out of O a. Discontinued Operations Loss O b. Estimated Warranty…
4. What amount should be reported as gross profit on sale? of current year, an equipment was leased to another entity France Company is a dealer in equipment. At the beginning Problem 14-15 (IAA) with the following provisions: Annual rental payable at the end of each year Lease term and useful life of machinery Cost of equipment Residual value-unguaranteed Implicit interest rate PV of an ordinary annuity of 1 at 12% for 5 periods PV of 1 at 12% for 5 periods 1,500,000 5 years 4,000,000 500,000 12% 3.60 0.57 At the end of the lease term the equipment will revert to the lessor. The entity incurred initial direct cost of P200,000 in finalizing the lease agreement. 1. What is the gross investment in the lease? a. 7,500,000 b. 8,000,000 c. 4,000,000 d. 4,500,000 2. What is the net investment in the lease? a. - 5,400,000 b. 5,685,000 c. 4,000,000 d. 3,500,000 3. What interest income should be reported for current year? а. 682,200 b. 648,000 c. 900,000 d. 960,000 a. 1,485,000 b. 1,685,000 c.…
Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the following pertinent information: 1,000,000 400,000 300,000 100,000 700,000 200,000 500,000 5 years 8 years 10% Annual rental payable at the end of each year Initial direct cost paid Lease bonus paid to lessor before commencement of the lease Lease incentive received Discounted amount of restoring building as required by contract Leasehold improvement Purchase option that is reasonably certain to be exercised Lease term Useful life of building Implicit interest rate Incremental borrowing rate 12% What is the initial lease liability? Select the correct response: 4,290,000
mpany purchaseda Problem 10-32 (IFRS) under a finance At the beginning of current year, Southstar Company leased a building with the following information: ity were originally Annual rental payable at the end of each lease year Initial direct cost paid Lease incentive received Lease bonus paid to lessor before commencement of lease Present value of cost of restoring the building as required by contract discounted at 8% Purchase option that is reasonably certain Lease term Useful life of building Implicit inierest rate Present value of an ordinary annuity of 1 at 10% for 6 periods Present value of 1 at 10% for 6 periods 1,500,000 405,000 50,000 300,000 lated depreciation and the remaining 0,000. -P1,500,000 cash. 945,000 1,000,000 6 years 10 years 10% 4.36 0.56 of the machinery 1. What amount should be recorded initially as cost of right of use asset? a. 8,750,000 b. 8,700,000 c. 9,900,000 d. 7,755,000 2. What amount should be recorded as annual depreciation of the right of the asset?…
$100,000 × 4.79079** = $479,079 Lease Payments Right-of-Use Asset - Present value of an annuity due of $1: n = 6,i = 10% How to use financial calculator to find the right of use asset? C $100,000 x 4.79079* = Lease Payments $479,079 Right-of-Use Asset *Present value of an annuity due of $1: n=6, i=10%
Calculate the NOI of a property based upon the information provided below: Building area: Average base rents: .NNN recoveries: Vacancy rate: Operating expenses . . • Percentage rent . Concessions . Annual debt service 165,720 O 315,720 O 375.720 440,220 O 478.500 O None of these 15,000 sqft $27.50 psf $4.00 psf 5.0% $4.30 psf $6,000 per year 3.0% $210,000 per year
How much is the cost of the right of use asset at the inception of the lease? (All required entries are to be written in the columnar worksheet together with the computations and the computation of the right of use asset that is written in the google form. Lease term 10 years Annual rental payable at the end of each term P240,000 Estimated life of machine 12 years Implicit interest rate 10% Present value of an annuity of P1 for 10 period at 10% 6.145 Present value of 1 at 10% for 10 periods 0.386 Unguaranteed residual value 150,000 Payment to lessor to obtain a long term lease 30,000 Annual maintenance cost…
XI. Direct Finance Lease – Lessee (PFRS 16)Problem 13. SMC Inc. leased a machine on January 1,2011 to SM Inc. with the following pertinentinformation:Annual rental payable at the beginning of each year P500,000Lease term 5 yearsUseful life of machine 6 yearsFair value of machine on January 1,2011 2,400,000Incremental borrowing rate of lessee 14%Implicit interest rate of lessor known to lessee 12%Bargain purchase option at the end of lease term 100,000Residual value of the machine 200,000Initial direct cost incurred by lessee 300,000Prepaid bonus paid by lessee 400,000Estimated restoration cost in which lessee has contractual obligation 1,000,000Required: Based on your audit, determine the following: ____________1. Initial amount recognized as right of use asset ____________2. Initial amount recognized as leased liability ____________3. Depreciation Expense in 2011 assuming cost model ____________4. Book value of right of use asset on December 31, 2012 ____________5. Current Lease…
PROBLEM 5: Lease Agreement with UNGUARANTEED Residual Value, RESTORATION COST and ANNUAL EXECUTORY COST Lazy Company leased a building with useful life of 10 years on January 1, 2020 for period of 8 years with fixed annual rental ofP800,000 which is to be paid at the end of each year. The residual value of P100,000 is unguaranteed. Initial direct cost incurred andpaid by the lessee amounted to P150,000. Additional payment to the lessor to obtain the long-term arrangement of the leaseamounts to P100,000. Annual property taxes/insurance/maintenance and other executory costs paid P90,000. The lease agreementfurther provides restoration cost of the leased asset at the end of lease term for P250,000 (present value). The implicit interest ratein the lease is 10%. REQUIRED: Prepare table of amortization and journal entries for the entire lease term
SMC Inc. leased a machine on January 1,2011 to SM Inc. with the following pertinentinformation:Annual rental payable at the beginning of each year P500,000Lease term 5 yearsUseful life of machine 6 yearsFair value of machine on January 1,2011 2,400,000Incremental borrowing rate of lessee 14%Implicit interest rate of lessor known to lessee 12%Bargain purchase option at the end of lease term 100,000Residual value of the machine 200,000Initial direct cost incurred by lessee 300,000Prepaid bonus paid by lessee 400,000Estimated restoration cost in which lessee has contractual obligation 1,000,000Except from the fact that there is a guaranteed residual value of P300,000 by the lessee instead of bargain purchase option and theannual rental is payable at the end of each yearRequired: Based on your audit, determine the following:____________4. Book value of right of use asset on December 31, 2012____________5. Current Lease Liability on December 31,2011____________6. Noncurrent Lease Liability…
SMC Inc. leased a machine on January 1,2011 to SM Inc. with the following pertinentinformation:Annual rental payable at the beginning of each year P500,000Lease term 5 yearsUseful life of machine 6 yearsFair value of machine on January 1,2011 2,400,000Incremental borrowing rate of lessee 14%Implicit interest rate of lessor known to lessee 12%Bargain purchase option at the end of lease term 100,000Residual value of the machine 200,000Initial direct cost incurred by lessee 300,000Prepaid bonus paid by lessee 400,000Estimated restoration cost in which lessee has contractual obligation 1,000,000Problem 14: Except from the fact that there is a the guaranteed residual value of P300,000 by the lessee instead of bargain purchase option and the annual rental is payable at the end of each yearRequired: Based on your audit, determine the following:____________1. Initial amount recognized as right of use asset____________2. Initial amount recognized as leased liability____________3. Depreciation…