Q 14 Dr Cash Select and drag the correct answers from the suggestions below into the blanks and then select Submit. Dr The Tower Inc. (as lessor) leased a building under a 15 year operating lease with annual payments of $15,000 payable in arrears. The cost of the building is $400,000 and useful life is estimated to be 50 years. As an incentive to sign the agreement, lease payments were reduced to $12,000 for the first three years. At the end of Year 1 Statement of Financial Position A What amounts will be recognised by The Tower Inc. at the end of the first year of the lease in the Statement of Financial Position and the Statement of Profit or loss and Other Comprehensive Income? Cr Income - B Cr Accumulated depreciation - $8,000 Statement of Profit or Loss and Other Comprehensive Income Dr Depreciation - $8,000 D A $12,000 $13,500 $15,000 $1,500 $2,000 $2,400 Deferred income from lease Trade receivables Financial assets D B $12,000 $14,400 $17,000

Q 14 Dr Cash Select and drag the correct answers from the suggestions below into the blanks and then select Submit. Dr The Tower Inc. (as lessor) leased a building under a 15 year operating lease with annual payments of $15,000 payable in arrears. The cost of the building is $400,000 and useful life is estimated to be 50 years. As an incentive to sign the agreement, lease payments were reduced to $12,000 for the first three years. At the end of Year 1 Statement of Financial Position A What amounts will be recognised by The Tower Inc. at the end of the first year of the lease in the Statement of Financial Position and the Statement of Profit or loss and Other Comprehensive Income? Cr Income - B Cr Accumulated depreciation - $8,000 Statement of Profit or Loss and Other Comprehensive Income Dr Depreciation - $8,000 D A $12,000 $13,500 $15,000 $1,500 $2,000 $2,400 Deferred income from lease Trade receivables Financial assets D B $12,000 $14,400 $17,000

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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