User Account

All Pages

Prepare a full lease schedule for Melvic Ltd

Assignment Help Accounting Basics
Reference no: EM132787275

Problem - Melvic Ltd. has signed a contract to lease a store from Glen Caper Ltd. nearby for a non-cancellable period of three years. The arrangement also provides an option for Melvic Ltd. to renew the lease for a further two years at the same annual payment rate. Melvic Ltd. will make expensive modifications to the building at commencement of the lease and these modifications are expected to have a useful economic life of 7 years. The terms of the lease relating to the building are as follows:-

Date of entering lease 1 July 2020

Duration of lease 3 years (plus option for further 2 years at the same rate)

Lease payments Initial payment of $40,000 plus half yearly payments of $60,000 payable at 31 December and 30 June

Implicit interest rate 12%

Cost of initial modifications paid in cash at commencement of lease $96,000

Economic Life of modifications 7 years with zero scrap value

Required - For this lease:

a) Discuss and determine if the contract between Melvic Lid and Glen Caper Ltd. contains a lease.

For the remaining sections of this question, assume that the contract contains a lease according to AASB 16 Leases.

b) Calculate the lease liability and lease asset for Melvic Ltd.;

c) Prepare a full lease schedule for Melvic Ltd., showing the division of the lease rental into interest and principal components; and

d) Provide the journal entries for the lease transactions in the books of Melvic Ltd. for the financial year ending 30 June 2021 (include journal entries at the inception 1/7/2020). Also include all relevant transactions pertaining to the modifications for the year ending 30 June 2021.

Reference no: EM132787275

Questions Cloud

Examine the challenges of performance management processes : Examines the challenges of performance management processes both in the U. S. and globally. Recommends the use of a cultural intelligence assessment as part of.
Develop a strategy for ongoing cross-cultural team building : Develop a strategy for ongoing cross-cultural team building. Identify ideas for enhancing social interactions between cross-cultural work teams.
Evaluate solutions in order to address workforce needs : Evaluate solutions in order to address workforce needs. You are the HR manager for the ABC Store responsible for identifying voluntary and involuntary attrition
Calculate basic earning power and return on equity : Broward's tax rate is 25%. Calculate basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC).
Prepare a full lease schedule for Melvic Ltd : Prepare a full lease schedule for Melvic Ltd., showing the division of the lease rental into interest and principal components
What is the accumulated depreciation of building in pontian : ARR Bhd purchased a 5-storey building in Segamat for RM1,000,000, What is the accumulated depreciation of building in Pontian as at 30 June 2016?
Compute the TPX Company return on equity : Excerpts from TPX Company's December 31, 2021 and 2020, financial statements are presented below: Compute the TPX Company return on equity
What measurement basis company apply to private company : Determine what measurement basis the company must apply to these private company investments within its pension portfolio. Explain.
Compute the weighted-average number of ordinary shares : Compute the weighted-average number of ordinary shares outstanding for 2021 that should be shown on comparative statements at the end of 2021.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Effect of business transaction on accounting equation

For each of the following items, give an example of a business transaction that has the described effect on the accounting equation:

  Grove corporation issued 4000000 of 8 bonds on october 1

grove corporation issued 4000000 of 8 bonds on october 1 2014 due on october 1 2019. the interest is to be paid twice a

  Find the dollar amounts that towson will report

Use this information to find the dollar amounts that Towson will report on its year-end Balance Sheet for Paid in Capital Common Stock in Excess to par

  Prepare the statement of financial position

Prepare the Statement of Financial Position for YTP as at 31 December 20X6, incorporating all the necessary adjustments

  Please select 4 companies and summarize similarities and

please select 4 companies and summarize the similarities and differences in reporting the financial performance and the

  Define distributions window to check that the distributions

Referring to Example 11.1, if the average bid for each competitor stays the same, but their bids exhibit less variability, does Miller's optimal bid increase or decrease?

  Question - Make adjustment journal

Question - Make adjustment journal of a payment of a balance due for 306 was credited to cash for 306 and credited to account payable for 360

  Callaghan motors bonds have 9 years remaining to maturity

callaghan motors bonds have 9 years remaining to maturity. interest is paid annually they have a 1000 par value the

  What amount must he invest today

Chris Bautista needs $23,000 in 7 years. What amount must he invest today if his investment earns 12% compounded annually

  Research a recent accounting scandal

Use the Internet to research a recent accounting scandal within the last five (5) years where the SEC accused public companies of accounting irregularities.

  The brodie corporation acquired bonds with a par value

On March 31, 2010, the Brodie Corporation acquired bonds with a par value of $400,000 for $425,800.

  The rationale for the market value method

On January 1, 2009, Brewster Company issued 2,000 of its five year, $1,000 face value

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