What is the amount to be recorded as a Non- Current Lease Liability in the books of Rib Ltd that is in accordance with AASB16 Leases on 30 June 2022? $136,364 $121,488 $190,909 $163,636
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![Rib Ltd signed a 4-year contract with Pillman Ltd for the use of a customised machinery on 1 July
2020. Rib Ltd intends to return the asset at the end of the lease term. The leased machinery meets
the criteria of a leased asset in accordance with AASB16 Leases. The following information shows
the lease terms:
Lease term (non-cancellable)
Expected useful life of the machinery
Expected fair value of the machinery at the end of lease term
Residual value guaranteed at the end of lease term
Purchase option price at the end of lease term
Net initial directly attributable costs (paid on 1 July 2020)
Annual lease payment (1st payment, 30 June 2021)
Annual maintenance & insurance included in the annual lease payment
Interest rate implicit in the lease
What is the amount to be recorded as a Non- Current Lease Liability in the books of Rib Ltd that is i
accordance with AASB16 Leases on 30 June 2022?
$136,364
$121,488
$190,909
4 years
8 years
$40 000
$70 000
$350 000
$20 000
$180 000
$30 000
10% p.a.
$163,636](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bb5200c-d4cf-40aa-8176-705020eaa7c1%2F5ed93a95-491b-43ce-9786-9a0d27689d94%2Fqj3roio_processed.jpeg&w=3840&q=75)
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- Small Ltd signed a 3-year contract with Big Ltd for the use of a factory on 1 July 2020 with the option to purchase the machinery at the end of the lease term. It is reasonably expected that Small Ltd will not exercise the bargain purchase option but returns the asset to the lessor. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable) Expected useful life of the machinery Expected residual value of the machinery Residual value guaranteed Expected fair value of the machinery at the end of lease term Bargain purchase price at the end of lease term Net initial directly attributable costs (paid at 1 July 2020) Initial lease payment (paid at 1 July 2020) Annual lease payment (paid in arrears at 30 June) Interest rate implicit in the lease O $36,857 O $98,284 O $36,857 3 years O $84,049 8 years nil $40 000 $50 000 $60 000 $10 000 What is the amount the depreciation expense…On 1 July 2019, XYZ Ltd leased a machinery from ABC Lid to be used to be used in the mining operations. The machinery cost XYZ Ltd S120 307, considered to be its fair value on that same day. The capital/finance lease agreement contained the fo!llowing provisions: The lease term is for 3 years, commencing on 1st July 2019 The lease is cancellable and with a 10 % charge of the leased asset's fair value from the lessor Annual lease payment, payable on 30 June each year S40,000 Estimated useful life of machinery 4 years Estimated residual value of the machinery at the end of useful life S6,000 Bargain purchase option that La Ltd can exercise at the end of lease term S15,000 Interest rate implicit in the lease 7% REQUIRED: 1. Calculate the present value of lease payment. 2. Prepare the lease schedules for XYZ Ltd. 3. Prepare the journal entries in the records of XYZ Ltd only for the year ended 30 June 2020.The following facts pertain to a non-cancelable lease agreement between Cullumber Leasing Company and Crane Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2025 Lessor's implicit rate Lessee's incremental borrowing rate Date 1/1/25 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30 12/31/30 Lease payment (A) $97,312 $97,312 $97,312 $97,312 $97,312 $97,312 $5,000 January 1, 2025 $97,312 $24,806 $20,456 $15,845 $10,957 $5,775 $283 $55,000 $50,000 6 6 The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Table shows the amortization schedule for lessee for the lease term: $546,000 years years 6 % Interest expense (B = Prev D* 6%)…
- The following facts pertain to a non-cancelable lease agreement between Sandhill Leasing Company and Carla Vista Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2025 Lessor's implicit rate Lessee's incremental borrowing rate Click here to view factor tables. (a) Date 1/1/25 1/1/25 1/1/26 The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. 1/1/27 1/1/28 1/1/29 Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places e.g. 5,275.) 1/1/30 12/31/30 $ $ Annual Lease Payment…The following information is provided for an equipment leased by Lessee from Lessor. Lessee and Lessor both use IFRS. Inception Date of Lease Annual Lease Payment (Due: Beginning of Year, Starting Jan 1, 2020) Purchase option at of Lease Term (Certain to be exercised by Lessee) Lease Term Economic Life of Leased Equipment Lessor's Cost Fair Value of Asset Lessor's implicit rate Lessee's incremental borrowing rate Salvage value at the end of economic life) Select one: True O False Unearned Interest Income 30,858 ÷ January 01,2020 Sales 22,642 = 21,500 The lessor will most likely classify this as Sales Type Lease. Cost of Goods Sold 3,000 7 years 10 years Lessor will record the following at the beginning of the Lease term: Lease Receivable 122,642 ÷ 98,114 Same as present value of all future payments. 8%, known to Lessee Known to Lessee 7% 0 TimeKeeping in view the IAS-17, classify the following transactions with reasons into operating lease or finance lease: LB Limited has obtained a generator for official lease for 2 year period whose useful life is 5 years. The C Ltd. has acquired an asset on lease the ownership of which will be transferred to the company at the end of lease term. iii.The D Itd. has acquired an asset on lease with an option to buy it at the end of lease term at scrap value. iv.The Z Ltd. has acquired an asset on lease for 9 years. The economic life of the asset is 10 years. The company has no intention to purchase it at the end of lease term. vX Ltd. has acquired an asset with annual lease payment of Rs. 50,000 for ten years whereas the fair value of the asset is Rs. 210,000
- On 1 January 2016, company A owned an asset with a net book of RM 100000. The fair value of the asset on this date was RM 120000. On this date, company A sold the asset to Granite Bhd for RM 150000 and immediately leased back the asset for a period of 5 years. The leaseback is an operating lease. Explain how company A shall account for the sale and leaseback transaction and show the journal entries required.Assume that on December 31, 2021, Stora Enso (FIN) signs a 10-year, non-cancelable leaseagreement to lease a storage building from Sheffield Storage. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of €71,830 beginning on December 31, 2021. 2. The fair value of the building on December 31, 2021, is €525,176. 3. The building has an estimated economic life of 12 years, a guaranteed residual value of €10,000, and an expected residual value of €7,000. Stora Enso depreciates similar buildings using the straight-line method. 4. The lease is non-renewable. At the termination of the lease, the building reverts to the lessor. 5. Stora Enso’s incremental borrowing rate is 8% per year. The lessor’s implicit rate is not known by Stora Enso. Instructions Prepare the journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2021, 2022, and…Kk.2.
- Chad Ltd negotiated a lease on the following terms: the term of the lease was 5 years; the estimated useful life of theleased equipment was 10 years; the purchase price was R60 000; and the annual lease payment was R5 000. This leaseshould be classified as_____.Select one:a.a financial leaseb.An operating leasec.neither operating nor finance leased.A finance leaseAssume that on December 31, 2018, Stora Enso (FIN) signs a 10-year, non-cancelable lease agreement to lease a storage building from Sheffield Storage. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of €71,830 beginning on December 31, 2018. 2. The fair value of the building on December 31, 2018, is €525,176. 3. The building has an estimated economic life of 12 years, a guaranteed residual value of €10,000, and an expected residual value of €7,000. Stora Enso depreciates similar buildings using the straight-line method. 4. The lease is non-renewable. At the termination of the lease, the building reverts to the lessor.5. Stora Enso's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Stora Enso. 1. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2018, 2019, and 2020.…On 1 March 2020,the company entered into a lease agreement in order to lease a manufacturing machine with a costprice of R250 000 (VAT inclusive). The period of the lease is five years, and the useful life of the machinery is estimatedat six years. The following is an extract from the lease agreement:4.1.1 Ownership of the machinery will be transferred to the Lessee at the end of the lease.4.1.2 Should the Lessee cancel the lease, the Lessor’s losses will be borne by the Lessee.Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used themanufacturing machine for a qualifying purpose. The company is a registered VAT vendor.Required:Provide the deferred tax movement per the balance sheet method for the lease agreement for the financial year ending31 December 2021. Clearly indicate whether the movement represents an income or an expense. Note:- Show all calculations, marks are awarded for calculations.- You may round off to the nearest Rand.
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