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On 01-Jan-23 Smith Ltd contracted to lease a machine for 4 years. Annual lease payments (commencing 31-Dec-23) are £40,000. Annual interest rates are 7.5%. a) b) c) d) Required: Show Smith's lease repayment schedule for this contract. Show the accounting entries required to record Smith's lease at the end of the first year. Amend Smith's balance sheet for 31-Dec-23 (shown below) to include this lease transaction. For Y/e 31-Dec-23, calculate Smith's gearing ratios before and after the addition of the lease transaction. Smith Ltd SFP at 31-Dec-23 £'000 £'000 NCA 200 ISC 250 Reserves 120 CA 350 Profit/Loss 50 NCL CL 100 30 Assets 550 Equity & Liabilities 550

On 01-Jan-23 Smith Ltd contracted to lease a machine for 4 years. Annual lease payments (commencing 31-Dec-23) are £40,000. Annual interest rates are 7.5%. a) b) c) d) Required: Show Smith's lease repayment schedule for this contract. Show the accounting entries required to record Smith's lease at the end of the first year. Amend Smith's balance sheet for 31-Dec-23 (shown below) to include this lease transaction. For Y/e 31-Dec-23, calculate Smith's gearing ratios before and after the addition of the lease transaction. Smith Ltd SFP at 31-Dec-23 £'000 £'000 NCA 200 ISC 250 Reserves 120 CA 350 Profit/Loss 50 NCL CL 100 30 Assets 550 Equity & Liabilities 550

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On 01-Jan-23 Smith Ltd contracted to lease a machine for 4 years. Annual lease payments (commencing 31-Dec-23) are £40,000. Annual interest rates are 7.5%. a) b) c) d) Required: Show Smith's lease repayment schedule for this contract. Show the accounting entries required to record Smith's lease at the end of the first year. Amend Smith's balance sheet for 31-Dec-23 (shown below) to include this lease transaction. For Y/e 31-Dec-23, calculate Smith's gearing ratios before and after the addition of the lease transaction. Smith Ltd SFP at 31-Dec-23 £'000 £'000 NCA 200 ISC 250 Reserves 120 CA 350 Profit/Loss 50 NCL CL 100 30 Assets 550 Equity & Liabilities 550
Transcribed Image Text:On 01-Jan-23 Smith Ltd contracted to lease a machine for 4 years. Annual lease payments (commencing 31-Dec-23) are £40,000. Annual interest rates are 7.5%. a) b) c) d) Required: Show Smith's lease repayment schedule for this contract. Show the accounting entries required to record Smith's lease at the end of the first year. Amend Smith's balance sheet for 31-Dec-23 (shown below) to include this lease transaction. For Y/e 31-Dec-23, calculate Smith's gearing ratios before and after the addition of the lease transaction. Smith Ltd SFP at 31-Dec-23 £'000 £'000 NCA 200 ISC 250 Reserves 120 CA 350 Profit/Loss 50 NCL CL 100 30 Assets 550 Equity & Liabilities 550
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