Core Concepts of Accounting Information Systems
13th Edition
ISBN: 9781118742938
Author: Mark G. Simkin, Carolyn S. Norman, Jacob M. Rose
Publisher: WILEY
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Chapter 2, Problem 9TY
To determine
Identify the statement which is correct regarding VPN.
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Zanzibar Limited entered into a lease agreement on July 1 2016 to lease some
highly customized hydraulic equipment to Kaizen Limited. The fair value of the
equipment as at that date was $700,000. The terms of the lease agreement were:
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6 years
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$100,000
$60,000
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6%
Note: the lease is cancellable but only with Zanzibar's permission
At the end of the lease term, the equipment is to be returned to Zanzibar Limited.
On July 1, 2016, Zanzibar incurred $12,000 in legal fees for setting up the lease. The
annual rental payment includes $10,000 to reimburse the lessor for maintenance
fees incurred on behalf of the lessee.
Requirements:
a) Discuss the nature of the lease using the appropriate criteria. Justify your
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b)…
Repsola is a drilling company that operates an offshore Oilfield in Feeland. Five years
ago, Feeland had a major oil discovery and granted licenses to drill oil to reputable,
experienced drilling companies. The licensing agreement requires the company to
remove the oil rig at the end of production and restore the seabed. Ninety percent of
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extraction of the oil. At the Statement of Financial Position (SOFP) date (December 31
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On January 1st 2023, Repsola obtained the license to construct an oil rig at a cost of
$500 million. Two years later the oil rig was completed. The rig is expected to be
removed in 20 years from the date of acquisition. The estimated eventual cost is 100
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Chapter 2 Solutions
Core Concepts of Accounting Information Systems
Ch. 2 - Prob. 1TYCh. 2 - Prob. 2TYCh. 2 - Prob. 3TYCh. 2 - Prob. 4TYCh. 2 - Prob. 5TYCh. 2 - Prob. 6TYCh. 2 - Prob. 7TYCh. 2 - Prob. 8TYCh. 2 - Prob. 9TYCh. 2 - Prob. 10TY
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 16DQCh. 2 - Prob. 17DQCh. 2 - Prob. 18PCh. 2 - In Discussion Question 2-1, you discussed...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 28PCh. 2 - Prob. 30CACh. 2 - Prob. 32CA
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- (a) A property lease includes a requirement that the premises are to be repainted every five years and the future cost is estimated at $100,000. The lessee prefers to spread the cost over the five years by charging $$20,000 against profits each year. Thereby creating a provision of $100,000 in five years' time and affecting profits equally each year. Requirement: Was it correct for the lessee to provide for this cost? Explain your decision (b) A retail store has a policy of refunding purchases by dissatisfied customers, even though it is under no legal obligation. Its policy of making refunds is generally known. Requirements: Should a provision be made at year endarrow_forwardWhat is the correct answer of this question general Accounting?arrow_forwardFinancial accountingarrow_forward
- PART B The Palmer School of Business operates a transportation service, solely for the purpose of providing commuting services to off-campus students. You have been hired as accounting students to analyze the cost of providing the transportation services and to develop a cost function which describes the behaviour of the related costs. The schools' administration has assembled the data for a twelve-month period pertaining to the monthly total costs of providing the service and the corresponding number of students who used the transportation system each month. You were recently taught how to use the Excel graphing tool, and a member of the team successfully generated the scattergram given below from the data set provided. Total Transportation Costs PALMER SCHOOL OF BUSINESS SCATTER DIAGRAM 300,000 Line of Best Fit 250,000 200,000 150,000 100,000 50,000 0 500 1,000 1,500 # of Students 2,000 2,500 3,000 The other team members are now tasked to use the graph to provide the administrators…arrow_forwardNeed true answer general Accounting questionarrow_forwardDon't use ai solution please solve this question general Accountingarrow_forward
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