loading...

MGT401 Financial Accounting II Assignment 2 Solution Spring 2014

FINANCIAL ACCOUNTING II (MGT401)
ASSIGNMENT NO. 02  
MARKS: 10 
ASSIGNMENT: 2 
Learning Objective 
This activity aims to enable the students to understand that how to prepare the  amortization schedule and how to record the journal entries regarding leasing assets. 

Case 
RS Company has entered into a contract to obtain the machinery on lease from Soneri  leasing Company on 1st July 2009. 
Fair value of the asset is Rs. 950,000;  Lease rentals are 5 annual installments of Rs. 219,450 starting from 30th June  2010. 
The implicit interest rate is approximately 5% per annum in this lease contract.  Depreciation is charged on written down method at 20%. 
Required: 
1) Show how this lease would be presented in the accounts of the lessee (lease  amortization schedule) for entire lease term. 
2) Show journal entries that are to be recorded in the books of lessee for the financial  year 2009 to 2010. 
3) Also mention the charges that have to be disclosed in income statement for the  year ended June 30th 2010 and for the year ended June 30th 2011, in the books of  lessee.

DOWNLOAD SOLUTION HERE
loading...