User Account

All Pages

Calculate the amount of the right-of-use asset

Assignment Help Cost Accounting
Reference no: EM132817827

On January 1, 2020, Brampton Corp., which uses IFRS 16, signs a 10-year, non-cancellable lease agreement to lease a specialty machine from Ajax Inc. The following information concerns the lease agreement.

1. The agreement requires equal rental payments of $73,580 beginning on January 1, 2017.

2. The machine's fair value on January 1, 2020 is $450,000.

3. The machine has an estimated economic life of 12 years, with an unguaranteed residual value of $12,000. Brampton Corp. depreciates similar equipment using the straight-line method.

4. The lease is non-renewable. At the termination of the lease, the machine reverts to the lessor.

5. Brampton's incremental borrowing rate is 12% per year. The lessor's implicit rate is not known by Brampton Corp.

6. The yearly rental payment includes $2,470.29 of executory costs related to insurance on the machine.

Problem (a) Calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement.

Problem (b) amortization schedule for the term of the lease to be used by Brampton.

Problem (c) Prepare the journal entries on Brampton Corp.'s books to record the payments and expenses related to this lease for the years 2020 and 2021

Reference no: EM132817827

Questions Cloud

Which of the items are controlled by the parent company : Which of the items are controlled by the parent company? Sales revenue determined by discretionary transfer pricing. / Lost production due to labor strikes
Break-even point in units for the proposal : a) The? break-even point in units for the proposal by Vendor A? = units (round to nearest whole number)
How might the components be effective for all students : Within the SIOP Model Planning Sheet, there is also a section that requires your reflection on the SIOP model. Examine the eight components of the SIOP.
What is the sales price for this bond : On January 1, Year One, Big Company offers to sell a $100,000 bond coming due in exactly 10 years. What is the sales price for this bond
Calculate the amount of the right-of-use asset : Calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement.
What should the company report as additional paid-in capital : What should the company report as additional paid-in capital in the stockholders' equity section of its balance sheet
How you would adapt the directed reading activity : Describe how you would adapt the directed reading activity, the directed reading-thinking activity, and literature-based reading and whole language to support.
What is the adjusting entry for on december of current year : Tenant of one of the units being leased failed to pay rent for November and December. If any, what is the adjusting entry for on December 31 of current year
How you might address the factors in your future classroom : Based on the National Reading Panel, there are five components of reading instruction that when properly taught, provide the greatest chance of success.

Reviews

Write a Review

Cost Accounting Questions & Answers

  How much cash needs to be credited in the journal entry

A petty cash fund was established with a $200 balance. How much cash needs to be credited in the journal entry to replenish the Petty Cash fund?

  What general journal entry

Stock at 30 June 2012 was valued at cost $5200 and the net realization value $5300. With selling costs $200. What general journal entry?

  Calculate the earnings of a under straight piece rate system

Calculate the earnings of A, B and C under straight piece rate system and Merrick's multiple piece rate system from the A produced 384 unitsparticular

  What portion of service department costs are allocated

What portion of service department 1's costs are allocated to P1 and to P2 under the direct method? What portion of service department 2's costs are allocated

  What are the different types of variances

What are the different types of variances that may occur in a business and factors the contribute to them. Please provide examples.

  Create a segmented income statement in contribution format

Traceable fixed expenses totaled $216,000 and were allocated as 70 percent to Eastern and 30 percent to Western. Common fixed expenses totaled $295,000.

  Relation of cost to financial and management accounting

Explain the relation of cost accounting to Financial and Management Accounting and how it helps management in decision making.

  Discuss about several assumptions you will personally make

Assume that you are actively searching for a job. Write (i.e. discuss) about several assumptions you will personally make relating to your personal expected revenue.

  Selling costs and margin management

Differentiate between Multiple Products, Selling Costs and Margin Management

  Discuss concept of throughput in theory of constraints

Discuss concept of throughput in theory of constraints is appropriate for retail and service industries. How would or could you apply this management technique

  Which of the following statements is true of costing systems

Luzent Corporation has two departments, Small and Large. Central costs could be allocated to the two departments in various ways.

  How many units did the company produce through the year

If production cost is $11 per unit under absorption costing each year, then how many units did the company produce through the year?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd