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    Intacc2-Quiz Exam

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    This document contains a quiz with multiple choice questions about lease accounting. It also includes 4 problems involving calculations related to accounting for leases. The problems provide lease terms and require calculation of right of use assets, lease liabilities, interest expense, and depreciation expense for various lease agreements.

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    Intacc2-Quiz Exam

    Uploaded by

    Cm
    95 views10 pages
    This document contains a quiz with multiple choice questions about lease accounting. It also includes 4 problems involving calculations related to accounting for leases. The problems provide lease terms and require calculation of right of use assets, lease liabilities, interest expense, and depreciation expense for various lease agreements.

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    This document contains a quiz with multiple choice questions about lease accounting. It also includes 4 problems involving calculations related to accounting for leases. The problems provide lease terms and require calculation of right of use assets, lease liabilities, interest expense, and depreciation expense for various lease agreements.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    95 views10 pages

    Intacc2-Quiz Exam

    Uploaded by

    Cm
    This document contains a quiz with multiple choice questions about lease accounting. It also includes 4 problems involving calculations related to accounting for leases. The problems provide lease terms and require calculation of right of use assets, lease liabilities, interest expense, and depreciation expense for various lease agreements.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 10

    Philippine Christian Univeristy

    Dasmarinas, Cavite
    Quiz 1 - Prelim AY 2020-2021

    III. Lease Payments made to lessor on or before commencement date


    1 IV. Estimated cost of dismanting, removing or restoring the underlying asset for which the lessee has no present obligat

    a. All of the statements


    b. I, II and IV
    c. I & III
    d. I II & III

    I. The right of use asset is presented as Noncurrent Asset as separate line item
    2 II. The right of use asset is presented as Noncurrent Liabilities

    a Both statements are true


    b Only I statement is true
    c Only II statement is true
    d Neither of the statements are true

    I. Useful life
    3 II. Lease term

    a Shorter between I and II


    b Only I statement is true
    c Only II statement is true
    d Longer between I and II

    III. Initial Direct cost paid by lessee


    4 IV. Unguaranteed residual Value

    a All of the statements


    b I, II and IV
    c I & II
    d
    I II depreciate
    I. should & III the asset by the lessee
    5 II. shoul depreciate the asset shorter between the useful life of the asset or lease term

    a Both statements are true


    b Only I statement is true
    c Only II statement is true
    d Neither of the statements are true

    6 The accounting concepts that is principally used to classify leases into operating or finance lease on the part of the lesso

    a Substance over form


    b Prudence
    c Materiality
    d Completeness

    7 The classification of a lease either operating finance or finance lease is based on

    a Lease term
    b the transfer of the risks and rewards
    c the economic life of the underlying asset
    d None of the choices
    he lessee has no present obligation

    nce lease on the part of the lessor is:


    1 On January 1, 2020, Overland Company closed a lease contract for newly constructed terminals and freight
    storage facilities.

    Compute
    a Right of Use asset 01.01.2020 3,501,900.00
    b. Lease Liability 01.01.2020 3,401,900.00
    c Interest Expense 2020 288,228.00
    d Depreciation Expense 2020 (Rounded to 2 decimal 437,737.50
    e Lease Liability 12.31.2020 1,690,128.00

    2 On January 1, 2020, Letty Company leased a machine with the following provisions.

    Annual lease payment starting December 31, 2020


    Lease term
    Useful life of machine
    Implicit interest rate in the lease
    Initial Direct Cost

    PV of an ordinary annuity of 1 at 10% for 5 periods


    PV of an annuity. of 1 in advance at 10% for 5 periods
    PV of 1 at 10% for 5 periods

    The entity has an option to purchase the machine on December 1, 2024 by paying P200,000.
    At the commencement date, it is reasonably certain that the purchase option will be exercised.

    Compute
    a Right of Use asset 01.01.2020 2,498,660.00
    b. Lease Liability 01.01.2020 2,398,660.00
    c Interest Expense 2020 239,866.00
    d Depreciation Expense 2020 (Rounded to 2 decimal 249,866.00

    3 On January 1, 2020, Lawton Company leased a machinery with an estimated useful life of 8 years.

    Annual lease payment starting January 01, 2020


    Lease term
    Useful life of machine
    Implicit interest rate in the lease
    Initial Direct Cost

    PV of an ordinary annuity of 1 at 12% for 7 periods


    PV of an annuity. of 1 in advance at 12% for 7 periods
    PV of 1 at 12% for 5 periods

    The lease contains neither a transfer of title to the lessee nor a purchase option.
    The entity had a residual value guarantee of P250,000 when the machinery is returned to the lessor upon

    Compute
    a Right of Use asset 01.01.2020 3,329,915.00
    b. Lease Liability 01.01.2020 3,179,915.00
    c Interest Expense 2020 309,589.80
    d Depreciation Expense 2020 (Rounded to 2 decimal 439,987.86

    4 On January 1, 2020 Gold Company Entered into a 5-year lease of a floor of a building with the following terms:

    Annual rental for the first three years payable at the end each of year
    Annual rental for the next two years payable at the end each of year
    Useful life of the building
    Implicit Interest rate

    PV of ordinary annuity for 10% at 5 periods


    PV of ordinary annuity for 10% at 3 periods

    The lease provides for neither transfer of title to the lessee upon expiration of the lease term nor a purchase
    option.
    Compute
    a Right of Use asset 01.01.2020 1,457,170.00
    b. Lease Liability 01.01.2020 1,457,170.00
    c Interest Expense 2020 145,717.00
    d Depreciation Expense 2020 (Rounded to 2 decimal 291,434.00
    ted terminals and freight

    Annual Payments PV factor PV


    Lease Liability ₱1,000,000.00 3.4019 ₱3,401,900.00
    Initial Direct Cost 250,000.00
    Lease Bonus (150,000.00)
    Right of Use Asset ₱3,501,900.00

    Date Payment Interest Principal


    01.01.2020
    01.01.2020 1,000,000.00 1,000,000.00
    12.31.2020 1,000,000.00 288,228.00 711,772.00
    12.31.2021 1,000,000.00 202,815.36 797,184.64
    12.31.2022 1,000,000.00 107,153.20 892,846.80

    600,000.00 Annual Payments PV factor PV


    5 Lease Payments 600,000.00 3.7908 ₱2,274,480.00
    10 Certain Purchase Opt 200,000.00 0.6209 124,180.00
    10% Total Lease Liability ₱2,398,660.00
    100,000.00 Initial Direct Cost 100,000.00
    Right of Use Asset ₱2,498,660.00
    3.7908
    4.1699
    0.6209

    P200,000.
    e exercised.

    Date Payment Interest Principal


    01.01.2020
    12.31.2020 600,000.00 239,866.00 360,134.00
    12.31.2021 600,000.00 203,852.60 396,147.40
    12.31.2022 600,000.00 164,237.86 435,762.14
    12.31.2023 600,000.00 120,661.65 479,338.35
    12.31.2024 600,000.00 72,727.81 527,272.19

    l life of 8 years.
    Annual Payments PV factor PV
    600,000.00 Lease Payments 600,000.00 5.1114 ₱3,066,840.00
    7 Guranteed Residual 250,000.00 0.4523 113,075.00
    15 Total Lease Liability ₱3,179,915.00
    12% Initial Direct Cost 150,000.00
    150,000.00 Right of Use Asset ₱3,329,915.00

    4.5637 Date Payment Interest Principal


    5.1114 01.01.2020
    0.4523 01.01.2020 600,000.00 600,000.00
    12.31.2020 600,000.00 309,589.80 290,410.20
    12.31.2021 600,000.00 274,740.58 325,259.42
    ned to the lessor upon
    12.31.2022 600,000.00 235,709.45 364,290.55
    12.31.2023 600,000.00 191,994.58 408,005.42
    12.31.2024 600,000.00 143,033.93 456,966.07
    12.31.2025 600,000.00 88,198.00 511,802.00
    12.31.2026 250,000.00 26,781.76 223,218.24

    ng with the following terms:

    350,000.00 Annual Payments PV factor PV


    450,000.00 350,000.00 2.49 870,415.00
    7 450,000.00 1.30 586,755.00
    10% 1,457,170.00

    3.7908 Date Payment Interest Principal


    2.4869 01.01.2020
    12.31.2020 350,000.00 145,717.00 204,283.00
    ase term nor a purchase 12.31.2021 350,000.00 125,288.70 224,711.30
    12.31.2022 350,000.00 102,817.57 247,182.43
    12.31.2023 450,000.00 78,099.33 371,900.67
    12.31.2024 450,000.00 40,909.26 409,090.74
    Carrying Amount
    ₱3,401,900.00
    2,401,900.00
    1,690,128.00
    892,943.36
    96.56

    Carrying Amount
    ₱2,398,660.00
    2,038,526.00
    1,642,378.60
    1,206,616.46
    727,278.11
    200,005.92
    Carrying Amount
    3,179,915.00
    2,579,915.00
    2,289,504.80
    1,964,245.38
    1,599,954.82
    1,191,949.40
    734,983.33
    223,181.33
    (36.91)
    ** Rounding off

    Carrying Amount
    1,457,170.00
    1,252,887.00
    1,028,175.70
    780,993.27
    409,092.60
    1.86

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