Sheridan Ltd. entered into a lease on June 1, 2023. The lease term is six years and requires annual rental payments of $27,900 at thebeginning of each year. Sheridan's incremental borrowing rate is 5% and the rate implicit in the lease is 9%.Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.(a)Your answer is correct.Calculate the capitalized amount of the right-of-use asset if Sheridan follows IFRS. (Round factor values to 5 decimal places, e.g.1.25124 and final answer to 2 decimal places, e.g. 5,275.75.)(b)Leased asseteTextbook and Media* Your answer is incorrect.136421.24 iAttempts: 1 of 3 usedCalculate the capitalized amount of the leased asset if Sheridan follows ASPE. (Round factor values to 5 decimal places, e.g. 1.25124and final answer to 2 decimal places, e.g. 5,275.75.)Leased Asset $148701.42

The objective of this question is to calculate the capitalized amount of the right-of-use asset…

Answered: Sheridan Ltd. entered into a lease on…

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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ok nt ences A finance lease agreement calls for quarterly lease payments of $7,056 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $168,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would record in conjunction with the second quarterly payment on October 1? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a partial amortization table up to the October 1 payment. Note: Enter all amounts as positive values. Round your answers to the nearest whole dollar. Date July 1 July 1 October 1 Lease Payment Effective Interest Decrease in Outstanding balance balance Required B >
STL enters into a 5-year lease of an item of plant on January 1, 2022. The annual rentals are P11.5 million, with the first installment paid on December 31, 2022. The present value of minimum lease payments are 50 million and the interest rate implicit in the lease is 5% per annum. Calculate the liability to be recognized in the Statement of Financial Position at December 31, 2023.
On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a cost and fair value of $780,000. The 5-year lease calls for equal annual payments at the beginning of each year. The equipment has an expected useful life of 5 years. The rate implicit in the lease is 8% but the lessee's incremental borrowing rate is 10%. What are the equal annual lease payments the lessor will charge? (Round to whole dollars) L The present value of an ordinary annuity at: 10% for 5 periods is 3.79079 8% for 5 periods is 3.99271 The present value of an annuity due at: 10% for 5 periods is 4.16986 8% for 5 periods is 4.31213 The present value of a single sum of $1 at: 10% for 5 periods is .62092 8% for 5 periods is .68058 O A. $181,972 OB. $180,885 OC. $175,820 OD. $195,356 O E. $162,795
On January 1,2024, Lowe's Inc. entered into a lease agreement with Traveler Inc. to lease a car for 3 years. The lease is accounted for as a finance lease and $5,000 in lease payments are due at at the beginning of the period starting January 1, 2024 and on December 31 of each year thereafter. There is no residual value. The rate implicit in the lease is 8%. On December 31, 2024, what entry (or entries) will Lowe's record regarding the lease? The present value of an annuity due at 8% for 3 years is 2.78326. (Round to whole dollars) OA. OB. OIC. O D. Lease expense Lease liability Right of use asset Interest expense Lease liability Cash Amortization expense Right-of-use asset Interest expense Lease liability Amortization expense Right-of-use asset Interest expense Lease liability Cash Debit 5,000 Debit 713 4,287 4,639 Debit 713 4,295 Debit 713 4,287 Credit 1031 3,969 Credit 5,000 4,639 Credit 713 4,295 Credit 5,000 A
2.
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WITH SOLUTION/COMPUTATION 53. Neal Corp. entered into a nine-year lease on a warehouse on December 31, 2019. Lease payments of P52,000, which includes payments for non-lease component of P2,000 (at stand-alone selling price), are due annually, beginning on December 31, 2019, and every December 31 thereafter. Neal does not know the interest rate implicit in the lease; Neal’s incremental borrowing rate is 9%. What amount should Neal report as lease liability at December 31, 2019?a. 280,000 b. 291,200 c. 450,000 d. 468,000
On December 31, 2020, Cleeneth Company leased equipment under a finance lease. Annual lease payments of P400,000 are due December 31 for 10 years. The equipment's useful life is 10 years, and the interest rate implicit in the lease is 10%. The lease obligation was recorded on December 31, 2020 at P2,700,000 and the first lease payment was made on that date. What amount should Cleeneth Company include in current liabilities in relation to the finance lease in its December 31, 2020 statement of financial position?
B10).
On January 1, 2020, Mountain Inc. leases a machine used in its operations. The annual lease payment is $10,000 due on December 31 of 2020, 2021, and 2022. The fair value of the machine on January 1, 2020 is $26,730. The machine has no residual value. Mountain could borrow on a three-year collateralized loan at 6%. If the lease is accounted for as a finance lease, the total expenses related to this lease contract that Mountain Inc. will report in its income statement for the year ending December 31, 2020 is Select one: a. $10,600 b. $10,514 c. $10,717 d. $10,000
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Lessee enters into a 10-year lease of property with annual lease payments of P50,000, payable at the beginning of each year. The contract specifies that lease payments will increase every two years on the basis of the increase in the Consumer Price Index for the preceding 24 months. The Consumer Price Index at the commencement date is 125. The rate implicit in the lease is not readily determinable. Lessee’s incremental borrowing rate is 5 per cent per annum, which reflects the fixed rate at which Lessee could borrow an amount similar to the value of the right-of-use asset, in the same currency, for a 10-year term, and with similar collateral. Discount factor for 5% for 9 periods is 7.10782.Lessee expects to consume the right-of-use asset’s future economic benefits evenly over the lease term and, thus, depreciates the right-of-use asset on a straight-line basis.At the beginning of the third year of the lease the Consumer Price Index is 135.Determine the amount of lease liability…

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