Reference no: EM132631174

On 1 July 20X1 Lessee Ltd leased some equipment from Lessor Ltd. The details of the lease arrangement are as follows:

1. The lease term was for 3 years
2. The interest rate implicit in the arrangement was 5%
3. The lessee paid an amount of $39,000 per annum to the lessor commencing on 1 July 20X1
4. The residual value at the end of the lease term was $24,000 of this, an amount of $19,000 was guaranteed by the lessee
5. $2,000 is the amount of the residual value guarantee that was expected to be payable by the lessee to the lessor at the end of the lease term
6. The lessee paid initial direct costs of $1,854 at the commencement of the lease
7. The leased asset will be returned to the lessor at the end of the lease term
   

Problem 1: What is amount that would be recognised by Lessee Ltd as the Right of Use Asset at the commencement of the lease?

The accounting profit before tax for Young Ltd for the year ended 30 June 2020 was $900,000

Additional information:

1. Plant was acquired by Young Ltd 2 years ago for $600,000
2. For accounting purposes, plant is depreciated at $40,000 per year
3. For tax purposes, plant is depreciated at $80,000 per year
4. The tax rate is 30% per annum.

Problem 2: What is the amount of current tax payable by Young Ltd for the year ended 30 June 2020? (Please round your result to the nearest dollar and enter a numerical)