Hi-Way Berhad leased a specialized equipment from TL Bhd for 5 yearly instalments of RM 30 million each payable at the end of each financial year. The equipment was completely installed and first operated on 1 July 2015. The fair value of the equipment as at that date was RM 115 million. The equipment had an estimated useful life of 5 years with no residual value. Hi-Way Berhad also leased a printing machine from SW Bhd on 1 July 2015 paying eight yearly instalments of RM 208000 each. The printing machine was acquired by SW Bhd on that date for RM 1.28 million. The machinery had a useful life of 15 years with no residual value. SW Bhd would undertake all maintenance and repairs. It is the company’s policy to allocate the finance interest using the sum of digits method. Required: Prepare the Statement of Financial Position ( extract ) as at 30 June 2016 and 30 June 2017 in the books of Hi- way Bhd.
Hi-Way Berhad leased a specialized equipment from TL Bhd for 5 yearly instalments of RM 30 million each payable at the end of each financial year. The equipment was completely installed and first operated on 1 July 2015. The fair value of the equipment as at that date was RM 115 million. The equipment had an estimated useful life of 5 years with no residual value.
Hi-Way Berhad also leased a printing machine from SW Bhd on 1 July 2015 paying eight yearly instalments of RM 208000 each. The printing machine was acquired by SW Bhd on that date for RM 1.28 million. The machinery had a useful life of 15 years with no residual value. SW Bhd would undertake all maintenance and repairs.
It is the company’s policy to allocate the finance interest using the sum of digits method.
Required:
Prepare the
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