The net asset "property under Finance Lease Obligations" has a 2017 balance of $6,468 million (11,637-5,169). Liabilities for these leases total $6,568 ($565+6,003). Why do the assets and liability amounts differ? Explain.
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| Balance Sheet ($ in millions) | |||
| Assets | 2017 | 2016 | |
| Property: | |||
| Property under Finance Lease Obligations | 11,637 | 11,096 | |
| Less: Accumulated Amortization | -5,169 | -4,751 | |
| Liabilities | |||
| Current Liabilities: | |||
| Finance lease obligations due within 1 year | 565 | 551 | |
| Long-term debt: | |||
| Long-term finance lease obligations | 6,003 | 5,816 | |
The net asset "property under Finance Lease Obligations" has a 2017 balance of $6,468 million (11,637-5,169). Liabilities for these leases total $6,568 ($565+6,003). Why do the assets and liability amounts differ? Explain.
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- Balance Sheet ($ in millions) Assets 2017 2016 Property: Property under Finance Lease Obligations 11,637 11,096 Less: Accumulated Amortization -5,169 -4,751 Liabilities Current Liabilities: Finance lease obligations due within 1 year 565 551 Long-term debt: Long-term finance lease obligations 6,003 5,816 1. Prepare a 2017 summary entry to record the company's lease payments, which were $800 million.Balance Sheet ($ in millions) Assets 2017 2016 Property: Property under Finance Lease Obligations 11,637 11,096 Less: Accumulated Amortization -5,169 -4,751 Liabilities Current Liabilities: Finance lease obligations due within 1 year 565 551 Long-term debt: Long-term finance lease obligations 6,003 5,816 1. Discuss some possible reasons why Walmart leases rather than purchases most of its premises?On July 1, 2016, York Company purchased a long-term investment, P1,000,000 of Park Company's 8% bonds for P946,000, including accrued interest of P40,000. The bonds were purchased to yield 10% interest. The bonds mature on January 1, 2022, and pay interest annually on January 1. York Company used the effective interest method of amortization. 1. What is the interest income for 2016? a. 80,000 b. 90,600 C. 45,300 d. 40,000 2. On December 31, 2016, what is the carrying amount of the investment in bonds? a. 911,300 b. 916,600 c. 953,300 d. 960,600
- The following information relates to Samson Engineering as at 30 June 2023: RProfit for the year180 000Drawings50 000Property920 000Long-term borrowings510 000Trade receivables380 000Plant and machinery250 000Trade payables180 000Short-term borrowings260 000Fixtures and fittings90 000Inventories420 000Equity at 1 July 20221 175 000Cash45 000Motor vehicles150 000 RequiredCalculate the following:The total non-current assets The total current assetsThe total assetsBalance sheet extracts as at 31/12/2019 & 31/12/2020 2019(RO) 2020(RO) Current assets Inventories 6500 4500 Account receivables 3400 5300 Prepaid Expenses 1220 1550 Current liabilities Account payables 4320 3450 Expense payables 3100 4700 The operating profit for 2020 was RO 22500 and the depreciation for the year was RO7650 The profit on sale of fixed assets RO 4200 . Amortisation of intangible assets OMR 550. Calculate cash flow from operating activityDeem Holdings Inc had cash and cash equivalents at January 1, 2019 of P400,000. The transactions and some financial information of Deem Holdings Inc for the year ended December 31, 2019 are as follows: •Borrowed P850,000 with a 9-month loan payable •Generated P50,000 income for selling fixed asset with a book value of P310,000. •Invested additional P480,000 cash •Purchased a plant asset for P650,000; P237,500 in cash and P412,500 in loan •Received P25,000 interest from term deposit •Invested P500,000 cash on the short-term money market •Paid fixed-term loan principal of P900,000 and interest of P90,000 •Withdrew P200,000 cash during the year •Received P340,000 in advance from customers •Cash payments for supplier's accounts P6,300,000 •Wages Expense shown in the statement of profit or loss is P75,000. At the end of the year, the statement of financial position shows Prepaid Wages Expense of P65,000. There was a Prepaid Wages Expense of P35,000 at the beginning of the year. •Accounts…
- User In February 2024, Cullumber Corp, began the construction of a 10-storey building. The construction is expected to be completed by January 2025. during 2024, the following payments were made: Apr. 1: 1010000 Jun. 1: 1500000 Aug. 1: 840000 Oct. 1: 890000 No asset specific debt was incurred. During 2024, Cullumber's general debt consisted of the following: $1.8 million, 5%, 2-year note, $1.1 million, 4.5%, 2-year note, $0.50 million, 3%, 5-year note. Calculate the avoidable borrowing costs. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Net income for Inkaleb Inc. for 2020 includes the effect of the following transactions involving the sale of fixed assets. Asset Sales Price Cost Gain (Loss)X P20,000 P 80,000 P 10,000Y 25,000 150,000 (18,000)Purchases of fixed assets during 2020 amounted to P340,000. The Accumulated Depreciation account increased P40,000 during 2020. How much is the depreciation expense for 2020?Why the amount of $35.3million is not used in the calculation of the carrying amount of financial asset? Epsilon prepares financial statements to 31 March each year. The following event has occurred which are relevant to the year ended 31 March 2018: On 1 April 2017, Epsilon loaned $30 million to another entity. Interest of $1·5 million is payable annually in arrears. An additional final payment of $35·3 million is due on 31 March 2020. Epsilon incurred direct costs of $250,000 in arranging this loan. The annual rate of interest implicit in this arrangement is approximately 10%. Epsilon has no intention of assigning this loan to a third party at any time. Required:Explain and show how the three events should be reported in the financial statements of Epsilon for the year ended 31 March 2018. You should assume that Epsilon only measures financial assets at fair value through profit or loss when required to do so by IFRS 9
- E10-18 Calculating Capitalized Interest Kit Company borrows $6 million at 12% on January 1, 2019, specifically for the purpose of financing the construction of a building that is expected to take 18 months to complete. Kit invests the total amount at 11% until it makes payments for the construction project. During the first year of construction, Kit incurs the following expenditures related to this construction project: January 1 $1,000,000 April 1 $1,600,000 October 1 $1,200,000 December 31 $500,000 Required: 1. Compute the amount of interest expense Kit would capitalize related to the construction of the building. 2. Compute the amount of interest revenue Kit would recognize. 3. Assume that Kit uses IFRS. What amount of interest would be capitalized related to the construction of the building?Trump Company constructed various assets at a total cost of $8,400,000 during 2019. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2019 were $5,600,000. Trump had the following debts outstanding at December 31, 2019: A. 12%, ten-year bonds issued at par on December 31, 2013, with interestpayable annually on December 31 $4,000,000 B. 9%, 3-year note payable, dated January 1, 2018, with interest payableannually on January 1 $2,000,000 C. 10%, 5-year note to finance construction of various assets, dated January 1, 2019, with interest payable annually on January 1 $3,600,000 Required:Compute the amounts of each of the following. Show all workings. i. Avoidable interest. ii. Total interest to be capitalized during 2019. Explain the rational for the decision.X company started construction of a new office building for its own use at an estimated cost of $5 000 000 on January 1, 2022, and completed the construction on December 31, 2022. During the year of construction (2022) the company had outstanding the following debt obligations. i. Specific Construction Debt: $2 000 000 12% note issued December 31, 2021. Interest payable semiannually Other Debt: $1 400 000 10% short-term loan. Interest payable monthly and principal payable at maturity on May 30, 2023 $1 000 000 11% long-term loan. Interest payable on January 1 of each year and principal payable at maturity on January 1, 2025 Total expenditures - $5 200 000 Weighted average accumulated expenditures - $3 500 000 One of the accounting interns on the other team having reviewed the statement of financial position commented that it just did not make any sense… this ’avoidable interest’…. In reality, isn’t all interest unavoidable …. No one lends money without expecting to be compensated for…
