building with remaining useful life of 30 years and At the beginning of current year. Judy Company sold immediately leased it back for 5 years. Sale price at below fair value Fair value of building Carrying amount of building Annual rental payable at the end of each year Implicit interest rate Present value of an ordinary annuity of 1 at 12% for 5 periods 18,000.000 20,000,000 24,000,000 1,000,000 12% 360 1. What is the initial lease liability? a. 3,600,000 b. 4,000,000 c. 4,800,000 d. 2. What the cost of right of use asset? a. 3,000,000 b. 4,320,000 c. 5,760,000 d. 6,720,000 3. What is the loss on right transferred? a. 4,000,000 b. 2,880,000 c. 5,760,000 d. 6,720,000 4. What is the interest expense of the seller-lessee for the current year? a. 120,000 b. 576,000 c. 672,000 d. 432,000 5. What is the net annual rent income of the buyer-lessor? a. 400,000.

building with remaining useful life of 30 years and At the beginning of current year. Judy Company sold immediately leased it back for 5 years. Sale price at below fair value Fair value of building Carrying amount of building Annual rental payable at the end of each year Implicit interest rate Present value of an ordinary annuity of 1 at 12% for 5 periods 18,000.000 20,000,000 24,000,000 1,000,000 12% 360 1. What is the initial lease liability? a. 3,600,000 b. 4,000,000 c. 4,800,000 d. 2. What the cost of right of use asset? a. 3,000,000 b. 4,320,000 c. 5,760,000 d. 6,720,000 3. What is the loss on right transferred? a. 4,000,000 b. 2,880,000 c. 5,760,000 d. 6,720,000 4. What is the interest expense of the seller-lessee for the current year? a. 120,000 b. 576,000 c. 672,000 d. 432,000 5. What is the net annual rent income of the buyer-lessor? a. 400,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At the beginning of current year, an entity sold building with remaining useful life of 25 years and immediately leased it back for 5 years. Sale price at fair value 20,000,000 Carrying amount of building 24,000,000 Annual rental payable at the end of each year 1,000,000 Implicit interest rate 12% Present value of an ordinary annuity of 1 at 12% for 5 periods 3.60 What is the cost of right of use asset? What is annual depreciation of the right of use asset? What is the loss on right transferred? What amount of net rental income should be reported by the lessor?
D4) Finance Cda leased plant over five years. Annual payments were £x in arrears with interest rates at 5%. Licensing fees to operate this plant cost GHI £y. Calculate the Right-of Use value of this asset in GHI’s accounts
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complete question XYZ Builders Ltd. need to acquire the use of a crane for their construction business and are considering buying or leasing a crane. The crane costs Rs.10000 subject to SLM depreciation with salvage value 0 at the end of 5 years. In contrast, the lease rent is Rs.3000 p.a. to be paid in advance each year for 5 years.XYZ Builders ltd can raise debt at 20% payable in equal annual instalments, each instalment due at the beginning of the year. Tax applicable in 35%. Should it lease or buy the asset?
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