User Account

All Pages

Prepare the portion of the statement of financial position

Assignment Help Accounting Basics
Reference no: EM132946958

Question - Sam Ltd enters into a 5 years lease non-cancellable agreement with West Ltd on 1st July 2020. The lease is for an item of truck that has a fair value of $476912 at the inception of the lease. Sam Ltd's incremental borrowing rate is 9%.

The truck is expected to have an economic life of 6 years, after which it will have an expected residual salvage value of $50,000. There is a purchase option that Sam Ltd will be able to exercise at the end of 5 year for $70,000. The rate of interest implicit in the lease is quoted as being 8%.

There are to be 5 annual payments of $120,000 being made at the end of each year along with an upfront payment of $30,000. The annual lease payment includes $20,000 representing payment to the lessor for the insurance and maintenance of the truck.

Required -

a) Prepare the journal entries for the year ending 30 June 2021 and 30 June 2022 (For both Sam Ltd and West Ltd) Show the Lease receipts and payments schedule.

b) Prepare the portion of the statement of financial position related to the leased asset and leased liability for the year ending 30 June 2021 and 30 June 2022 (For Sam Ltd).

c) Prepare the journal entries for the year ending 30 June 2025 (For Sam Ltd).

Reference no: EM132946958

Questions Cloud

What is johnson basic eps : Johnson Company has net income of $10,000 and paid $1,000 cash dividends to its preferred shareholders. What is Johnson basic EPS
What would be the value of this bond : A bond that matures in 16 years has a $1,000 par value. What would be the value of this bond if it paid interest annually
Is the design appropriately linked to the evidence hierarchy : Is the design appropriately linked to the evidence hierarchy? Is the type of design used appropriate? What are the threats to internal and external validity?
What might art cinema version of stagecoach narrative look : What might an art cinema version of Stagecoach's narrative look like? Could you imagine a complex/post-classical variation of Stagecoach or The Rider?
Prepare the portion of the statement of financial position : Prepare the portion of the statement of financial position related to the leased asset and leased liability for the year ending 30 June 2021
Explain how the processes interact to affect the patient : The patient is a 24-year-old female administrative assistant who comes to the emergency department, How these processes interact to affect the patient
Discuss patient education based on prescribed therapy : Discuss patient education based on prescribed therapy. List one or two adverse reactions for the selected agent that would cause you to change therapy.
What amount of income would be necessary : Salaries traceable to the other partners are estimated to be P100,000. What amount of income would be necessary
Find the amount of gross profit on the income statement : Use the below financial information to answer question: Operating expenses $45,000. Find the amount of gross profit on the income statement

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the horizon value of operations

If the WACC is 10%, then what is the horizon value of operations, Vop(Year 2)? What is the current value of operations, Vop(Year 0)

  On december 31 2014 pacific rail corporation leased a train

on december 31 2014 pacific rail corporation leased a train car from southern transportation company for a ten year

  Describe the employer contributions

Describe the employer contributions that are specific to the province of Québec, their rates and thresholds where available

  Calculate the key financial ratios

Calculate the key financial ratios-including liquidity and efficiency, solvency, profitability and market prospects ratios. Create 1 page summary spreadsheet.

  List control weaknesses in the accounting for cash receipts

There are two invoice sets that are used for cash sales and credit sales respectively. List control weaknesses in the accounting for cash receipts

  Compute cost of goods sold

Question - Compute cost of goods sold using the following information: Finished goods inventory, beginning $720 and Cost of goods manufactured 4,120

  Prepare company stockholder equity section of balance sheet

Melcher cur-rently holds those shares in treasury. Prepare the company's stockholders' equity section of the balance sheet to reflect this information

  What is best estimate of the consulting project npv

Stock opened the following day at $16.50. The company has 150 million shares outstanding. What is your best estimate of the consulting project's NPV?

  The company is currently selling 7000 units per month fixed

the company is currently selling 7000 units per month. fixed expenses are 615000 per month. the marketing manager

  Compute the amount of depreciation

Analyzing and Recording Entries Related to a Change in Estimated Life and Residual Value Reader's Digest is a global publisher of magazines.

  Calculate and plot both marginal utility and total utility

Calculate and plot both the marginal utility and the total utility on the same graph with the utility on the vertical axis and quantity on the horizontal axis.

  List three important classes of participants in organisation

List three important classes of participants in this organisation. Identify the resources that each contributes to and receives from the organisation.

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