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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.

A 24 hours extra/grace period after the due date is usually available to overcome uploading difficulties which may be faced by the students on last date. This extra time should only be used to meet the emergencies; and above mentioned due date should always be treated as final to avoid any inconvenience.

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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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