FINANCIAL ACCOUNTING II (MGT401)
ASSIGNMENT NO. 02
DUE DATE: 25TH
JULY, 2014
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.
IMPORTANT:
24 hours extra / grace period after the due date are usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
Make sure to upload the solution file before the due date on VULMS.
Any submission made via email after the due date will not be accepted.
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.
IMPORTANT:
24 hours extra / grace period after the due date are usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
Make sure to upload the solution file before the due date on VULMS.
Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
Use the font style “Times New Roman” or “Arial” and font size “12”.
It is advised to compose your document in MS-Word format.
You may also compose your assignment in Open Office format.
Use black and blue font colors only.
Use the font style “Times New Roman” or “Arial” and font size “12”.
It is advised to compose your document in MS-Word format.
You may also compose your assignment in Open Office format.
Use black and blue font colors only.
RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
It is submitted after the due date.
The file you uploaded does not open or is corrupt.
It is in any format other than MS-Word or Open Office; e.g. Excel,
PowerPoint, PDF etc.
It is cheated or copied from other students, internet, books, journals etc.
Please note that your assignment will not be graded or graded as Zero (0), if:
It is submitted after the due date.
The file you uploaded does not open or is corrupt.
It is in any format other than MS-Word or Open Office; e.g. Excel,
PowerPoint, PDF etc.
It is cheated or copied from other students, internet, books, journals etc.
Note related to load shedding: Please be proactive
Dear students!
As you know that Post Mid-Term semester activities have started
and load shedding problem is also prevailing in our country.
Keeping in view the fact, you all are advised to post your activities
as early as possible without waiting for the due date. For your
convenience; activity schedule has already been uploaded on
VULMS for the current semester, therefore no excuse will be
entertained after due date of assignments, quizzes or GDBs.
Dear students!
As you know that Post Mid-Term semester activities have started
and load shedding problem is also prevailing in our country.
Keeping in view the fact, you all are advised to post your activities
as early as possible without waiting for the due date. For your
convenience; activity schedule has already been uploaded on
VULMS for the current semester, therefore no excuse will be
entertained after due date of assignments, quizzes or GDBs.
