Scribd Logo
Upload

Welcome to Scribd!

  • 57 views

    Cpa Review School of The Philippines Manila

    Uploaded by

    Jeslyn Kris Alobba Saguibo
    1. The document contains 4 problems related to operating lease and leaseback accounting. The problems provide details on the sale and leaseback of various assets and ask questions to calculate amounts such as initial lease liability, cost of right-of-use asset, gain/loss on sale, and net rental income. 2. The problems require applying concepts such as present value calculations using implicit interest rates to determine initial lease liabilities and right-of-use asset costs. 3. Gain/loss on sale is calculated based on sale price versus carrying amount, and depreciation of right-of-use assets and net rental income involve allocating amounts over the lease term.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Cpa Review School of The Philippines Manila

    Uploaded by

    Jeslyn Kris Alobba Saguibo
    57 views2 pages
    1. The document contains 4 problems related to operating lease and leaseback accounting. The problems provide details on the sale and leaseback of various assets and ask questions to calculate amounts such as initial lease liability, cost of right-of-use asset, gain/loss on sale, and net rental income. 2. The problems require applying concepts such as present value calculations using implicit interest rates to determine initial lease liabilities and right-of-use asset costs. 3. Gain/loss on sale is calculated based on sale price versus carrying amount, and depreciation of right-of-use assets and net rental income involve allocating amounts over the lease term.

    Original Description:

    vv

    Original Title

    6834 Operating Lease and Lease Back

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The document contains 4 problems related to operating lease and leaseback accounting. The problems provide details on the sale and leaseback of various assets and ask questions to calculate amounts such as initial lease liability, cost of right-of-use asset, gain/loss on sale, and net rental income. 2. The problems require applying concepts such as present value calculations using implicit interest rates to determine initial lease liabilities and right-of-use asset costs. 3. Gain/loss on sale is calculated based on sale price versus carrying amount, and depreciation of right-of-use assets and net rental income involve allocating amounts over the lease term.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    57 views2 pages

    Cpa Review School of The Philippines Manila

    Uploaded by

    Jeslyn Kris Alobba Saguibo
    1. The document contains 4 problems related to operating lease and leaseback accounting. The problems provide details on the sale and leaseback of various assets and ask questions to calculate amounts such as initial lease liability, cost of right-of-use asset, gain/loss on sale, and net rental income. 2. The problems require applying concepts such as present value calculations using implicit interest rates to determine initial lease liabilities and right-of-use asset costs. 3. Gain/loss on sale is calculated based on sale price versus carrying amount, and depreciation of right-of-use assets and net rental income involve allocating amounts over the lease term.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    CPA REVIEW SCHOOL OF THE PHILIPPINES

    Manila
    FINANCIAL ACCOUNTING AND REPORTING VALIX/VALIX/ESCALA/SANTOS/DELA CRUZ

    OPERATING LEASE AND LEASEBACK


    1. On January 1, 2021, an entity purchased a new machine for P6,000,000 for the purpose of leasing it.
    The machine had an estimated 10-year life. On April 1, 2021, the entity leased the machine to a
    lessee for three years at a monthly rental of P400,000. The lessee paid the rental for one year of
    P4,800,000 on April 1, 2021 and additionally paid P900,000 to the lessor as a lease bonus to obtain
    the three-year lease. On April 1, 2021, the entity paid P300,000 to a broker as a finder fee. What is
    the net rental income of the lessor for 2021?
    a. 3,150,000
    b. 4,350,000
    c. 3,200,000
    d. 4,400,000
    2. On January 1, 2021, an entity leased an equipment to a lessee under a 3-year operating lease. Total
    rent for the lease term is P3,600,000, payable P50,000 monthly for the first lease year, P75,000
    monthly for the second lease year and P175,000 monthly for the third lease year. All payments were
    made when due. On December 31, 2022, what amount should be reported as accrued rent receivable?
    a. 2,100,000
    b. 1,200,000
    c. 900,000
    d. 0

    3. At the beginning of current year, an entity sold an equipment with remaining life of 10 years and
    immediately leased it back for 4 years at the prevailing market rental.
    Sale price at fair value 6,000,000
    Carrying amount of equipment 4,500,000
    Annual rental payable at the end of each year 800,000
    Implicit interest rate 10%
    Present value of an ordinary annuity of 1 at 10% for four periods. 3.17
    1. What is the initial lease liability?
    a. 2,536,000
    b. 3,200,000
    c. 3,000,000
    d. 0
    2. What is the cost of right of use asset?
    a. 1,902,000
    b. 2,598,000
    c. 2,536,000
    d. 0
    3. What is the gain on right transferred?
    a. 866,000
    b. 634,000
    c. 750,000
    d. 0
    4. What is the annual depreciation of the right use asset?
    a. 475,500
    b. 190,200
    c. 634,000
    d. 253,600
    5. What is the net rental income of the lessor?
    a. 800,000
    b. 600,000
    c. 200,000
    d. 400,000
    6834
    Page 2

    4. At the beginning of current year, an entity sold building with remaining useful life of 25 years and
    immediately leased it back for 5 years.

    Sale price at fair value 20,000,000


    Carrying amount of building 24,000,000
    Annual rental payable at the end of each year 1,000,000
    Implicit interest rate 12%
    Present value of an ordinary annuity of 1 at 12% for 5 periods 3.60

    1. What is the initial lease liability?


    a. 3,600,000
    b. 4,000,000
    c. 4,800,000
    d. 0

    2. What is the cost of right of use asset?


    a. 3,000,000
    b. 4,320,000
    c. 5,760,000
    d. 3,600,000

    3. What is annual depreciation of the right of use asset?


    a. 864,000
    b. 720,000
    c. 500,000
    d. 0

    4. What is the loss on right transferred?


    a. 4,000,000
    b. 3,280,000
    c. 2,000,000
    d. 1,500,000

    5. What amount of net rental income should be reported by the lessor?


    a. 1,000,000
    b. 1,500,000
    c. 800,000
    d. 200,000

    END
    6834

    You might also like