Can you solve this second leasing question? (payments in arrears) Rikton plc, who has a 31st December year-end, entered into a three-year lease for a piece of equipment on 1 January 20X 0. Rikton plc has agreed to make payments of £20,000 in arrears for the leasing term, so the lease payments are due on 31 December 20X0, 31 December 20X1, 31 December 20X2. The rate of interest implicit in the lease was 10%. Both the lease term and the asset's estimated useful life were three years. Rikton uses straight line depreciation for all its assets. Rikton paid initial direct costs for the leased item of £1,000. Your task: Using IFRS16 Leases, fill out the missing values in the financial statement extracts shown below. Note that they represent the 2nd year of the lease. SOFP Extract as at 31st December 20X2 Under Assets Right-of-use asset: at cost ? Less Right - of-use asset: Accumulated Depreciation ? Right-of-use asset: Net book value? Under Liabilities Non-current lease liability ? Current lease liability ? SOCI Extract for the year ended 31 Dec 20X2 Among expenses Depreciation for right-of-use asset ? Finance charge ?

Can you solve this second leasing question? (payments in arrears) Rikton plc, who has a 31st December year-end, entered into a three-year lease for a piece of equipment on 1 January 20X 0. Rikton plc has agreed to make payments of £20,000 in arrears for the leasing term, so the lease payments are due on 31 December 20X0, 31 December 20X1, 31 December 20X2. The rate of interest implicit in the lease was 10%. Both the lease term and the asset's estimated useful life were three years. Rikton uses straight line depreciation for all its assets. Rikton paid initial direct costs for the leased item of £1,000. Your task: Using IFRS16 Leases, fill out the missing values in the financial statement extracts shown below. Note that they represent the 2nd year of the lease. SOFP Extract as at 31st December 20X2 Under Assets Right-of-use asset: at cost ? Less Right - of-use asset: Accumulated Depreciation ? Right-of-use asset: Net book value? Under Liabilities Non-current lease liability ? Current lease liability ? SOCI Extract for the year ended 31 Dec 20X2 Among expenses Depreciation for right-of-use asset ? Finance charge ?

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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