RDBS purchased an asset costing £1,000,000 at the beginning of the year 2018. It has an expected life of five years and no residual value. The asset will be depreciated on a straight-line basis in line with the company’s policy. The following are the allowances for tax depreciation. Year £ 2018 300,000 2019 250,000 2020 200,000 2021 150,000 2022 100,000 RDBS has recently entered into a lease contract with CKK Ltd. The details of the lease are as follows: The lease commences on 1st January 2021. The cost of the lease is £100,000. The lease has 5years lease term. Rentals of £26,000 per annum are in payable advance, each 1 January. The interest rate per annum is 15.15%. b) Show the balance sheet figure for ‘Net Investment in Finance Lease’ in the books of RDBS for years 1- 5, analyzed between amounts receivable within one year and amounts receivable after one year c) Discuss the reason behind the use of different rates of exchanges in the translation of the financial statements of overseas companies
RDBS purchased an asset costing £1,000,000 at the beginning of the year 2018. It has an expected life of five years and no residual value. The asset will be
|
Year |
£ |
|
2018 |
300,000 |
|
2019 |
250,000 |
|
2020 |
200,000 |
|
2021 |
150,000 |
|
2022 |
100,000 |
RDBS has recently entered into a lease contract with CKK Ltd. The details of the lease are as follows: The lease commences on 1st January 2021. The cost of the lease is £100,000. The lease has 5years lease term. Rentals of £26,000 per annum are in payable advance, each 1 January. The interest rate per annum is 15.15%.
b) Show the
c) Discuss the reason behind the use of different rates of exchanges in the translation of the financial statements of overseas companies
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