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Week 8 - Question 3 (10 marks) FRM Ltd acquired an item of equipment and enters...
Tyson Ltd enters into a non-cancellable five-year lease agreement with Benson Ltd on 1 July 2018....
Tyson Ltd enters into a non-cancellable five-year lease agreement with Benson Ltd on 1 July 2018. The lease is for an item of machinery that, at the inception of the lease, has a fair value of $369 824. The machinery is expected to have an economic life of six years, after which time it will have an expected salvage value of $60 000. There is a bargain purchase option that Tyson Ltd will be able to exercise at the end...
Acumen Ltd enters into a 5-year agreement to lease an item of machinery from Ascor Ltd...
Acumen Ltd enters into a 5-year agreement to lease an item of
machinery from Ascor Ltd on 1 July 2019. Acumen Ltd incurred costs
of $3928 in setting up the lease agreement. The machinery has a
fair value of $492 000 at the inception of the lease and it is
expected to have an economic life of 6 years, after which time it
will have a residual value of $45 000. The lease agreement details
are as follows.
All insurance...
QUESTION 2 On 1 July 2019, Black Ltd leased a coffee making machine from Roast Ltd....
QUESTION 2 On 1 July 2019, Black Ltd leased a coffee making machine from Roast Ltd. Roast Ltd had purchased the machine on that day for its fair value of $197 541. The lease agreement contained the following provisions: 3 years $50 000 $53 000 Lease term Initial payment on 1 July 2019 Annual rental payment, in arrears (three payments commencing 30 June 2020) Residual value at end of the lease term (Proportion of residual guaranteed by the lessee) Interest...
A capital lease agreement for equipment requires Granger Transport Ltd. to make 10 annual payments of...
A capital lease agreement for equipment requires Granger Transport Ltd. to make 10 annual payments of $40,000, with the first payment due on January 2, 2014, the date of the inception of the lease. The present value of the nine future lease payments at 10 percent is $230,360. Required 1. Calculate the present value of the lease at 5 percent if your instructor has taught present value. 2. Journalize the following lessee transactions: 2014 Jan. 2 Beginning of lease term...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? [3.3121.0.7350] Duration of lease 4 years Life of leased asset 6 years Guaranteed residual $0 Unguaranteed residual $0 Bargain Purchase Option $4,000 Lease payment at inception $0 Annual lease payments (paid at year ends) $10,000 Interest rate implicit in lease 8% $34 518 $39 736 $36 061 $33 121
Turnbull Ltd has entered into an agreement to lease a machine to Abbott Ltd. Details are:...
Turnbull Ltd has entered into an agreement to lease a machine to Abbott Ltd. Details are: Length of lease 5 years Commencement date 1 July 2013 Annual lease payment, payable 30 June each year commencing 30 June 2014 $8 000 Fair value of the Machinery at 1 July 2013 $34 797 Estimated economic life of the Machinery 8 years Estimated residual value of the Machinery at the end of its economic life $2 000 Residual value at the end of...
On 1 July 20X1 Lessee Ltd leased some equipment from Lessor Ltd. The details of the...
On
1 July 20X1 Lessee Ltd leased some equipment from Lessor Ltd. The
details of the lease arrangement are as follows: The lease term was
for 8 years • The interest rate implicit in the arrangement was 6%
• The lessee paid an amount of $46,000 per annum to the lessor
commencing on 1 July 20X1 • The residual value at the end of the
lease term was $25,000 of this, an amount of $16,000 was guaranteed
by the lessee...
Lanier Dairy Ltd. leases its milk cooling equipment from Green Finance Corporation. Both companies use IFRS...
Lanier Dairy Ltd. leases its milk cooling equipment from Green Finance Corporation. Both companies use IFRS 16. The lease has the following terms. 1. The lease is dated May 30, 2017, with a lease term of eight years. It is non-cancellable and requires equal rental payments of $30,000 due each May 30, beginning in 2017. 2. The equipment has a fair value and cost at the inception of the lease of $211,902, an estimated economic life of 10 years, and...
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd....
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd. City Vans Ltd acquired the truck at a cost of $180 000. The truck will be painted with Deliveries Ltd's logo and advertising and the cost of repainting the truck to make it suitable for another owner four years later is estimated to be $40 000. Deliveries Ltd plans to keep the truck after the lease but has not made any commitment to the...
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd....
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd. City Vans Ltd acquired the truck at a cost of $180 000. The truck will be painted with Deliveries Ltd's logo and advertising and the cost of repainting the truck to make it suitable for another owner four years later is estimated to be $40 000. Deliveries Ltd plans to keep the truck after the lease but has not made any commitment to the...
Acumen Ltd enters into a 5-year agreement to lease an item of
machinery from Ascor Ltd on 1 July 2019. Acumen Ltd incurred costs
of $3928 in setting up the lease agreement. The machinery has a
fair value of $492 000 at the inception of the lease and it is
expected to have an economic life of 6 years, after which time it
will have a residual value of $45 000. The lease agreement details
are as follows.
All insurance...
QUESTION 2 On 1 July 2019, Black Ltd leased a coffee making machine from Roast Ltd. Roast Ltd had purchased the machine on that day for its fair value of $197 541. The lease agreement contained the following provisions: 3 years $50 000 $53 000 Lease term Initial payment on 1 July 2019 Annual rental payment, in arrears (three payments commencing 30 June 2020) Residual value at end of the lease term (Proportion of residual guaranteed by the lessee) Interest...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? [3.3121.0.7350] Duration of lease 4 years Life of leased asset 6 years Guaranteed residual $0 Unguaranteed residual $0 Bargain Purchase Option $4,000 Lease payment at inception $0 Annual lease payments (paid at year ends) $10,000 Interest rate implicit in lease 8% $34 518 $39 736 $36 061 $33 121
On
1 July 20X1 Lessee Ltd leased some equipment from Lessor Ltd. The
details of the lease arrangement are as follows: The lease term was
for 8 years • The interest rate implicit in the arrangement was 6%
• The lessee paid an amount of $46,000 per annum to the lessor
commencing on 1 July 20X1 • The residual value at the end of the
lease term was $25,000 of this, an amount of $16,000 was guaranteed
by the lessee...
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd. City Vans Ltd acquired the truck at a cost of $180 000. The truck will be painted with Deliveries Ltd's logo and advertising and the cost of repainting the truck to make it suitable for another owner four years later is estimated to be $40 000. Deliveries Ltd plans to keep the truck after the lease but has not made any commitment to the...
Question 3 (16 marks) Deliveries Ltd leased a truck from a truck dealer, City Vans Ltd. City Vans Ltd acquired the truck at a cost of $180 000. The truck will be painted with Deliveries Ltd's logo and advertising and the cost of repainting the truck to make it suitable for another owner four years later is estimated to be $40 000. Deliveries Ltd plans to keep the truck after the lease but has not made any commitment to the...
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