MGT401 Assignment # 2

[Sharmeen Zehra Zaidi]

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.

[+ M.Tariq Malik]

Please Discuss here about this assignment.Thanks

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

[Anabiya Dar]

Dear sis AATIKA your answer is wrong you should check it and use proper method for do that and when you will complete this numerical than your answer is match and hint are given in your numerical you should attempt your numerical according to lecture # 29 with proper calculation and method.  because i also completed my assignment and my answer is match.your answer is 75 % correct  not 90% correct and 25%  wrong.

[Aatika Qasim]

than shyr your calculation ............i compare it with my calculation .............if you can send

[Aatika Qasim]

meny 29 lecture k hisab sy hi kiya hy ek ek value compare kar k kiya hy.......pehly hanouts ki values calculate ki thi phir apni ki hy

[Sharmeen Zehra Zaidi]

Assignment:
XYZ ltd. enters into a lease contract to obtain the factory equipment from ABC leasing company on 1st July 2011. Information regarding lease contract is given below; Fair value of the equipment is Rs. 728,200. Lease rentals comprise of 4 annual installments of Rs. 215,000 starting from 30th June 2012. For this lease contract IRR is approximately 7% per annum. Company has adopted written down method to charge the depreciation at 15%.
Required:
a) Prepare lease amortization schedule to show how this lease would be presented in the accounts of the lessee for entire lease term.
b) Show journal entries that are to be recorded in the books of lessee for financial year 2011 to 2012.
c) Calculate the charges that have to be disclosed in income statement for the year ended June 30th 2012 and for the year ended June 30th 2013

[Behzad MBS]

Gals n Guys, lets start this discussion.

[Fahad Riaz]

Anybody to discuss...?

[saifee]

plzzzzzzzzz discus and upload solution

[Aatika Qasim]

i made the whole assignment roughly...................but u can take help from handouts page number 112 to 115 lecture no 27 to 29

[Aatika Qasim]

Fair value = 728200
Installation = 215000
IRR p.a. = 7%
Depreciation = 15 % (W.D.V)

Calculation of PV
----------------------
Years PV

1 215000 215’000*(1+7%)-1 = 200,925
2 215000 215’000*(1+7%)-2 = 187,785
3 215000 215’000*(1+7%)-3 = 175,485
4 215000 215’000*(1+7%)-4 = 164,005

Lease rent Financial charges Principle Principal outstanding
728200
215000 50980 164020 564195
215000 39494 175485 388710
215000 27210 187785 200925
215000 14065 200925
---------- --------- ----------
860000 141745 728200

Necessary entries for this process
-----------------------------------------

Recording of Equipment
---------------------------------
Dr) Assets subjected to financial a/c 728,200
Cr) Liability subjected to financial a/c 728,200
Transfer to current maturity
---------------------------------
Dr) Liability subjected to financial a/c 164,020
Cr) Current maturity a/c 164,020

Dr) Installation amount of assets a/c 215,000
Cr) Bank a/c 215,000

Dr)Current maturity a/c 164,020
Dr)Financial charges a/c 50,980
Cr)Bank a/c 215,000

Dr) Liability subjected to finance a/c 175,485
Cr) Current maturity of lease a/c 175,485

Dr) Depreciation a/c (31st July 2012) 109,230
Cr) Accumulated Depreciation a/c 109,230

[Aatika Qasim]

ye rahi calculation correct hy ...........................agr kisi ki differnt aay to muje b bata dena kindly ye two questions ka answer hy
compare it with handouts

[Akbar khan]

aatika sis ap calculation dubara kar k check kr len sab ans wrong hen ... and plz somone give some ideas of qstion nmbr 3.