Financial Accounting Assignment with Solved Questions and Answers
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Added on 2023/04/23
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This document contains solved questions and answers related to Financial Accounting. It includes questions on Sprintfast Couriers, Petersen Limited, Deliveries Limited and City Vans Limited, and Lightning Bolt Limited. The document also includes working notes and references.
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Running head: FINANCIAL ACCOUNTING Financial Accounting Name of the Student: Student ID: Author’s Note:
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4FINANCIAL ACCOUNTING Question 3: Deliveries Limited and City Vans Limited Requirement (a): Working Note:
5FINANCIAL ACCOUNTING Requirement (b): According to the provided information, the lease receipt in June 2023 indicates unguaranteed residual on the basis that there is an expectation that the lessee would make the payment and it would have the ownership of the truck. This implies that the lessee would make the payment of $50,000 to the lessor, instead of returning the asset expected to have a salvage value of $50,000. However, there would still be inclusion of unguaranteed residual within the present value of the lease receivable (Spencer and Webb 2015). This is because the lessor expects the truck to be returned having residual value of $50,000 after the end of the lease, even if the lessee does not prefer taking ownership of the truck. Requirement (c):
6FINANCIAL ACCOUNTING Working Notes: Depreciation expense is computed by keeping in mind that that the lessee would keep the truck after the completion of the lease term. Requirement (d): The third entry and the fourth entry in the above table are made, as the truck is not leased anymore. Instead, it is owned and there is a need that leased assets are to be disclosed
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7FINANCIAL ACCOUNTING distinctively from freehold assets (Barone, Birt and Moya 2014). Therefore, the balances of the existing leased truck are moved across to the truck balances. Question 4: Lightning Bolt Limited Requirement (a): Working Note: Requirement (b):
8FINANCIAL ACCOUNTING
9FINANCIAL ACCOUNTING References: Barone,E.,Birt,J.andMoya,S.,2014.Leaseaccounting:Areviewofrecent literature.Accounting in Europe,11(1), pp.35-54. Spencer, A.W. and Webb, T.Z., 2015. Leases: A review of contemporary academic literature relating to lessees.Accounting Horizons,29(4), pp.997-1023.