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Hello, sir, I am a bit confused. Why cash change was not in the SoFP?
Sir,
Thank you for the excellent lecture. However, I suggest that you help us to solve part two of the question for a simple reason. The logic used to determine the non current liability and the current liability seems to be different if the rentals are paid in advance. I have not been able to decode this logic. I came across it in Kaplan.
Thank you in advance!
Hi
It’s simple enough – just work out the dates and amounts of the payments to be made in the next ( say ) two years and you can then see how much is to be paid in the next twelve months and therefore how much is a long term debt
Thanks
May I know why we started from 2004? Question said they acquired the asset on 1 January 2009. I am so confused.
in Giedris, why we calculated the lease for two years while the questions asked to prepared the extracts for year ended 31-12-2009. the lease started on 01-01-2009. It should be only one years…..
@haidernchd, Hi… calculating for the 2yrs will assist with the determination of Current Liabilities reported at the end of the 1st yr…at least I found that it helped.
@bajprincess, You’re absolutely correct. We need to subdivide the obligation to the lessor into current and long term and the easiest way is to progress the calculations up to the end of the accounting year following the year we are asked to consider
In example two (Giedris) the estimated used life of the asset was nine (9) years however seven (7) years was used to calculate the depreciation. It was noted that seven (7) years was not mentioned in the question at any point. Why was the depreciation worked at seven (7) years.
@ppatterson, 14 half yearly instalments? depreciate over the lesser of useful life and lease term!
or this is two different contracts, if different contracts then what about this question, how it is calculated , i am a little bit confused about it.
@jehanhasan, You could really do with a “picture” of the “obligations account” where you show the capital amount outstanding and show the dates when the capital amount is then changed by the interest calculated on that capital amount. Then show the payment of the installment and the date and that should then leave you with the capital amount outstanding for the next period until we again calculate the interest ….. and so on
sir in example 1 the payment is in arears and in example two it is clearly written that the rental payment is on 1st january and 1 july but in your answer , you did write the payment of 1500 on 30 june and 31 december so my question is, if the payment date does n,t effect the calculation then why it is mentioned clearly in question ? kindly explain about it.
kind regards
@jehanhasan, It DOES affect the calculation – the payment date determines the capital element outstanding at any point in time and it’s the capital element upon which the interest is calculated until the next installment date
Where do you get the TNCA figure of 13714 from?
Thanks
@ribberson, Cost less depreciation?
dears Sir, Am I correct to think this question video was mixed on editing. At around 3 mins 5 secs the working figures appear to be suddenly totally different from the figures about 15 seconds before..i’m confused. Please view the video from 2min 45 sec to 3min 15 secs
@fzinyemba, Hi, no, it’s fine. The screen shots you refer to are the situation / schedule after two payments ( the earlier screen ) and then 2 instalments after that. If you look upwards from the second screen, you’ll find 15,295 higher up.
It’s just that the second screen doesn’t show the 15,295 from the first screen
Is that clear? I know what I’m trying to say but it seems to have come out a bit jumbled!
@MikeLittle,
Thanks Mike,
Now it makes sense to me.
your lectures are brilliant
@fzinyemba,
there is something wrong with leasing i should think so cos i have played it twice and i don’t understand a thing. you still the best for me Mike so jus check it up
Dear Sir
Why have you started with 2004? The notes state that Giedris aquired asset on 1 January 2009 this I believe is the same for example 1
Should it start with 2009 the year when the asset was aquired?
Many thanks
I do not understand the answer to this question. I am completely confused,
@rimisac, I’ll look at the question – possibly tomorrow, when I have a bit of time
Sir, I don’t understand the answer to Giedruola that you said we do it ourselves especially extract of the SoFP where its written in the answer as follows:
TNCA 13714
C.L 1712
LTL 11583
Interest
not yet
accrued 665
My question is why is it the same as Gieoris and that figure of 665, its confusing please if u can help.
Zamina.