Free

Account for Lease - Assignment Example

Add to wishlist

Summary

The paper 'Account for Lease' is a good example of a Finance and Accounting Assignment. According to Greuning (2005), the consolidation process will involve adding assets and liabilities of Beach Ltd to those of Sandy Ltd while excluding inter-company balances. Determination of goodwill on consolidation…

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER92.4% of users find it useful

Read Text

Subject: Finance & Accounting
Type: Assignment
Level: College
Pages: 1 (250 words)
Downloads: 0

Extract of sample "Account for Lease"

Description

Dr.

Cr.

Leased asset account

Finance Lease Liability

(To record leasing of land and buildings under a finance lease)

4,334,700

Finance Lease Liability

Cash/Bank a/c

(To record the payment of the lease rentals)

600,000

Requirement (b)

General journal entries as at 1st July 2015 – Anderson Ltd Books

Description

Dr.

Cr.

Land and Buildings

Cash/Bank a/c

(To record purchase of land and buildings)

4,334,700

Cash/Bank a/c

Finance Lease Receivable a/c

(To record the receipt of the lease income)

600,000

Requirement (c)

General journal entries as at 30th June 2025 – Lisa Ltd Books

Description

Dr.

Cr.

Profit & Loss a/c

Finance Lease Liability

(To record the finance charge at the end of the period)

500,000

Requirement (d)

General journal entries as at 30th June 2025 – Anderson Ltd Books

Description

Dr.

Cr.

Cash/Bank a/c

Profit & Loss a/c

(To record the lease rental income at the end of the period)

500,000

Question 2: Account for Income Tax

General journal entries to account for tax

Description

Dr.

Cr.

Long service leave

Profit & Loss a/c

(To record the long service leave that has not been paid)

20,000

Warranty expenses

Profit & Loss a/c

(To record Warranty expenses that have not been paid)

20,000

Profit & Loss a/c

Depreciation charge

(To record depreciation expenses that have not been accounted for)

20,000

Profit & Loss a/c

Income tax expense

(To record income tax expense)

96,000

Question 3: Consolidation

According to Greuning (2005), the consolidation process will involve adding assets and liabilities of Beach Ltd to those of Sandy Ltd while excluding inter-company balances.

Determination of goodwill on consolidation

$000

Cost of Investment in Beach Ltd.

900

Less: Net assets acquired

700

Goodwill on consolidation

200

Determination of group retained earnings

$000

Pre-acquisition earnings

200

Sandy Ltd.

500

Bal C/d (Balancing figure)

600

Beach Ltd.

300

800

The following is the consolidated financial position of the group

Sandy Ltd & Beach Ltd

Consolidated Statement of financial position

as at 30th June 2015

$000

ASSETS

Non-Current Assets

Land

1,000

Property, Plant & Equipment

1,600

Accumulated depreciation

(613)

987

Goodwill

200

Total Non-Current Assets

2,187

Current Assets

Cash

120

Accounts receivable

100

Inventory

263

Total Current Assets

483

Total Assets

2,670

Liabilities & Equity

Current Liabilities

Accounts payable

110

Dividends payable

150

Total Current Liabilities

260

Non-Current Liabilities

Loan

810

Total Liabilities

1,070

Shareholders’ Equity

Share capital

1,000

Retained earnings

600

Total Shareholders’ Equity

1,600

Total Liabilities & Equity

2,670

CHECK THESE SAMPLES OF Account for Lease

Benefit of Using Islamic Account in the UK

… The paper 'Benefit of Using Islamic account in the UK" is an outstanding example of a finance and accounting case study.... The paper 'Benefit of Using Islamic account in the UK" is an outstanding example of a finance and accounting case study.... nbsp;The finance industry and Islamic banking are developing at a yearly rate of more than fifteen percent (Abdul-Rahman, 2010)....

6 Pages (1500 words) Case Study

International Corporate Reporting

noAmount2006JanGovernment grant_930The IAS 17 deals with lease payment.... Amount paid as lease will be credited in cash account.... lease payment for the motor vehicle is calculated as follows:Dec 31/06Dec 31/07 Dec 31/08Dec 31/09Dec 31/10Lease AccountTOTAL:£ 275,000£55,000£55,000£55,000£55,000£55,000The interest is credited in cash account.... noAmountDec 31/10Cash275,000 Total annual lease payment = £55,000 + £90,000 = £145,000The IAS 16 contains information about purchase of plant like factory....

6 Pages (1500 words) Assignment

Leases and Liabilities

Lastly an organization can upgrade equipment to the latest technologies by modifying the lease as opposed to buying on the same.... Flexibility Leases allow an organization to spread the total asset leasing cost across the lease period.... Fixed Payments The lease agreement indicates the amount payable by the lessee to the lesser for the entire lease period.... Operational credit lines line and working capital can be preserved through lease financing and considering the fact that leases require no or little down payment....

6 Pages (1500 words) Assignment

Australian Income Tax System

According to ID 2006/297, the extent of deductions for this case will be limited to income from leased fee and the projected interest to be earned from the property during the lease period (Prince, 2011).... Fletch may have contributed, his brother the lease is effectively financing the balance of the purchase price on his behalf.... White would be making numerous trips to Australia to visit his wife and he also opened a bank account at the Commonwealth Bank of Australia....

6 Pages (1500 words) Assignment

Australian Accounting Standards Board

Examples of property investment include land which is used for long terms business, land that is held now whose future has not been recognized, a building that is held an organization, building which is not occupied but held for later lease and finally any property which is being maintained for the future investment (Chalmers & Godfrey 2006).... On the other hand, the property which is not under AASB 140 includes the property which the owner intends to sale under the normal business operations, an investment which is being held and maintained by a third party as recognized in the law of contracts, the property of the owner like the land held by the owner for future use, an investment held by the owner for future improvement and any property of the owner which is due for disposal and finally we have the property which has been leased to another organization in the account of finance lease (Chalmers & Godfrey 2006)....

7 Pages (1750 words) Case Study

Accounting Policies at Woolworth Limited

WestFamers LTD is accounting for goods in progress, finished goods and manufactured goods while Woolworth Limited has not indicated how they account for manufactured goods for all their annual financial incomes.... … The paper 'Accounting Policies at Woolworth Limited" is a good example of a finance and accounting case study....

7 Pages (1750 words) Case Study

Santos Limited Annual Report

… The paper “Santos Limited Annual Report” is a worthy example of a report on finance & accounting.... Santos limited is an Australian company dealing in petroleum and gas exploration founded on 18th March 1954.... Santos is the acronym for the South Australia Northern Territory Oil Search....

6 Pages (1500 words)

The Australian Accounting Standards Board

In the new rules, a lessee is required to determine their right to use various assets that represent their right to use any underlying leased asset as well as lease liability.... The right to use assets is measured with correspondence to the other non-financial assets while the lease liability measured against the financial liabilities.... The agreement included a 30-year lease and a possibility of extension for a further 30 years (Malaysia 2016, para 2....

6 Pages (1500 words) Term Paper