~\ fitto @!) INTERMEDIATE ACCOUNTING 2 QUIZ 4 NAME: BAQBACENA, Anni JUDIH 4 secon: 401222 INSTRUCTIONS: Rea the questions careuly and encele the bestanswer,Strty no erasures. Fale {ofllow withave2 points deduction (i) eee it det costsincared bya lesan consmmatingsanuatve or dele ase ‘Charged to uneared income inthe fist perod of the lease term ‘Charge 1o costo ales the first period ofthe lease term ‘E_ Deferred and allocated over the lease tem a proportion tothe recognition of rent revenve 1. Deferred and allocated over the lease term on a straight hine bass ¢ @ which one ofthe allowing isa correct statement of one of he indatrs fa ance ase? [A.The ease transfers ownership ofthe property tothe lessor The ease contains a purchase option The lease term s forthe major part ofthe economic Me ofthe eased property (0) The minimum lease payments (excluding executor oss) equals or exceeds 90% of he fr value ofeased property lat an amount equal to the A. @Atessor sat recognize aset held under a finance lease saree A costofte asset cross rete Gross ivestmentin th ease retin esse sola meas the rit of se ase a @ con a aivae .Presentvaue D-borc whichever ower ‘A, @nsae ad easeback transaction, any ences sales price over fa vale shal +e accumed oan rang prone by be estor to selertesce @eseount eo ran poe yn ee ores be secunted o rpnyent of se payment 0,8 recogni rowan fs te ries tat te essex mayan he operating ese ode under whch fhe towing reumetace? fn Sorermicase 8 tow-value lease ath ABB ‘when lease doesnot meet any ofthe finance lease criteria set by FAS 16 1p atestor nhich underlying asset is of low value shalncude a ofthe folowing, except 8 orfce funiture Personal computers Telephones wats the treateent of unguaranteed residual vale In determining he cost of goods sold under 8 sales type lease? nected by Maden‘A. Aded to cost of underiying asset (@petucted trom cost of underving asset at abe eros C tanored 1 Deducted from cost of underying asset at present value ing lease should be _ Pia cect ons nered by lesor in oer ‘expensed immediately 8. ignored {C Capitalzed as part of cost of eased asset & amortized over useful Ie spltateed as part of cost of leased assat & amortized over lease term 30a se intarest rate tobe use by lessee to compute for present vale of ait payments? A. Lessee’ incremental borrow Implicit interest ate High quality corporate bonds interest rate Dacre i essee leased an equipment with estimated useful life of 9 yeas from lessor. The 6-year non: Zancelable lease provides that equipment wil revert to lssor atthe end ofthe lease term. Lessee appropriate It accounted fr the lease as finance lease. Te leased asset should be depreciated by lessee over Agys (ove 109s itdepends cose ber fa value of undering ase at inception ofthe lease ver the caring amount shall $e recognized by sel esr 3 St Unearned income frm rect nancing lease 0: Manufacturer profit rom rect nacing ease €-Unearned come om sles yp ease _ Aa navscrer roi tom aes pe esse “34 The mary ference between sles ye ase and ect francine? Ie otation fl direct costincurred by lesa ver the ease term Ghrecoenivon of manutacurers pots commencement of lease © besreiton which is recordedby lessor Rental caectons whch are recorded as rena income Keer th tense contig purchase pn that easonbly cern abe exried sould oprecit the right of use asset over 5 Useful ie of eset, seule of set or lease term, whichever i higher grate CC. Usefullife of aset or lease term, whichever is lower yf cstentiee mol dens ccm ian Tn sepends mosis lite Company fs engaged in leasing machine under direct financing lease with the fllowing information: Cost of machine 3,488,960 Guaranteed residual value 160,000, Useful fe lease term a years Immpliirate 10%, Pv of OA @ 8 periods 5.335Pv ofl @ 8 periods 0.466 “The annual rentals payable at the end af every yer, and the machine shall revert 1o fessor upon end of 10.) ax ic Dhow much is the annual rental? ‘623,984 G3, 376 510,000 ee sae re 5,120,000 : 5,231,805 Sw sachs the newest inthe ase? 3,488,960 wot He nadie 8. 3328,960, 314,400, 0. 3688,960 uch s the interest income forthe curent year? $12,000 8.332896 coma 48.96 Canatis the carrying amount of ease receivable onthe end of current yer? @sas7sss 8.287768 3.837886 0.388.960, stany Company leased ofice prem to Mihy Company fr yer ase ter beginning nary 1 rary ee parents the et fF he et year wou be P100,000 and for 2 through Sear 6 aoe eo pany To inde Milky to ene the ase, egranted Mily thes tree months ofthe come _pSoarahs aay conmny nso ee 9 ‘ons z tte a 75.00 Kou much should Hany Company report as ease receivable on December 31, 20247 23,780 ana Taw 8 57,250 wea | 48,250 in 10 Oar ‘om sanvary 1 2023, Mich Company leased a bung rom lesor wih the folowing details1,250,000 Annual ena payable atthe end of even" ay 0,000 tia rect ost pad inuting F125 000 commision to bo * 135, | Lessor’ enbursement for broker’ commission pad by asee | 250.000 Leasehold improvement urchse option thats easonably certain tobe eerie 625,000 Lease term sys Usetltfe ayes Impicneret oe 10% PVof OA Fors periods @ 10% 379 Vo for periods @ 10% ose | , Peo mach sal tne emo us ase be nay copied? 5750000 4 as7 nb | @ssco0m 20 | ite e-sarso00 "syns ~ thal Od el o.s625000 E0000 pon cn ease aio be eported on ecb 31, 2087 144937500 simmer ps sit se 8.4648750 jon. - sinc 870 «3,961,250 bite mt 99708 Yaer.st 387 500 | wes ous much sthe deprecation expense for eo 20227 (7.500 fawn /® agin ® 1.200.000 a 79780 1.125000 ans ‘om much isthe interest expense for year 2022? 1 562.500 goase un yy, + SHEE 9.536250 si f ones 9.473.750 al pas ‘on January 3, 2023, Chase Company sold a machine to Morgan Company for P760,000 but leases it back for 4syear term. information relating to sale and leasebacki 2s follows Faievalue of machine 80,000, carrying amount 680,000 “Anmual renal payable at the end ofeach year 200,000 Usetut ite 20415 tease term ayes empl rate 10% PV of OR at 10% for 4 perods 3.16991p (2 How much shall be recorded as com of ight of use ase at commencement date? 753.00 aie 8. 513,980, at 1 al Cale Pine ©cs3.000 ar saz, c (43) How much is the gain on sale and leaseback? @ssou fre oh 423 4 Ub Gan ante 8,200,000 iste cast b. 74095 [At the beginning of the current year, Messi Company leased 2 machine to Mayo Company for 10-year lease term for P850,000 per year. At inception of the ease, Messi received ,000,000 covering ist Wo ‘years of rent and non-refundable security deposit of P2,300,000 which can be applied to rental payment forthe lyst 2 year, tase hb raped carn by on anor 31, 20237 ‘2300000 s.1.70n000 ei @rsoon0 {hvac abe apr nr aby Decne 3,208 ‘2300000 s.cona0o Qxrm000 D 2er0