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Dated: Jan 26, 16
Important announcement
Assignment # 02
Financial accounting II (MGT401)

Dear Students!
This is to inform that Assignment No. 2 will be opened on January 27, 2016 and due date of assignment submission will be February 02, 2016.

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1....
july 11               

        lease asset                                             728200
                            to lease liability                              728200

                 recording of lease asset and obligation 

june 2012 

            interest a/c                                     50974

                            accrued interest account             50974

                       recording of interest expense

june 2012   

                accrued interest account             50974

                  lease liability   a/c                 164026

                                 bank a/c                         215000

              payment of lease installment      

june 2012 

              depreciation                       109230

                        to accumulated depreciation        109230

workings 

present value of MLP   = Installment   ( 1- (1+r)n  

                                                             r

                              =   215000 (1- (1+0.07)-4)

                                                    0.07

                             = 728200 

lease asset and lease liability should be the value lower of fair value or present value of MLP   ......both are same 

depreciation     = 15% of cost(728200)     

interest for the first year    =      7% of  lease liability   (728200)

upload to correct solution 

upload full solution 

koi help ni kr raha??? 

solution uploaded 

I have uploaded solution my dear, plz find my attachment in my comment 

Guys here is Assignment 2 Solution 
best of luck dears

Attachments:

hy Yousaf Shahzad Ansari  is it a correct solution???

hi,

yes Amna it is 

thnx yousaf...

my pleasure 

 

SOLUTION:                                                            

Part A

Lease amortization schedule

      Rate 7% per annum

Years

Lease Rental

Financial Charges

Principal Amount

Outstanding Principal

 

 

 

 

Rs.728,200

1

215,000

50,974

164,026

564,174

2

215,000

39,492

175,508

388,666

3

215,000

27,207

187,793

200,873

4

215,000

14,127

200,873

-

Total

860,000

131,800

728,200

 

 

 

 

 

 

Part B

General Entries

 

Date

Description

Debit

Credit

 

01-07-11

Factory to equipment subject to finance lease A/C

Liability subject to Finance Lease A/C

Recording asset at the acceptation of lease July 1,2011

728,200

 

 

728,200

01-07-11

 

Liability subject to Finance Lease A/C

Current maturity of lease A/C

Transfer to current maturity at the inception of lease

164,026

 

 

164,026

30-06-12

 

Current maturity of Lease A/C

      Financial charges A/C

   Bank  charges

                 Payment of first lease rental

164,026

 

 

50,974

175,508

 

 

Liability subject to Finance Lease A/C

Current maturity of lease A/C

Transfer to current maturity at the inception of lease June 30, 2011

 

175,508

 

 

175,508

 

30-06-12

 

Depreciation Expense A/C

Accumulated Depreciation A/C

     Depreciation      June 30,2012

 

109,230

 

 

 

109,230

 

 

 

Part C

 Profit and Loss for the year June30, 2012.

 

Depreciation A/C 728,200x 15%               109,230

Lease Financial Charges                                            50,974

 

  Profit and Loss for the year June 30, 2013.

Depreciation A/C    728,200-109,230 x 15%                                 92, 845
 Lease Financial Charges                                        39, 492

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

thnx asadullah.....

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