[miliubh]

I don’t feel this paper was reflective of the syllabus at all. Really disappointed with the paper considering the amount of work I put in felt it did not allow the hard work to pay off. I covered everything on the syllabus in preparation.

[miliubh]

Excellent thanks

[miliubh]

perfect thanks

[miliubh]

Hi all,

Same question but slightly different –

Is this question saying that the $2m deposit is already included in PV of $25,272,000.
I was adding $2m to $25,272,000 to get PV.

Thanks in advance.

On 1 October 20X4 Flash Co acquired an item of plant under a five-year lease agreement. Under the terms of the agreement, an immediate deposit of $2m is payable on inception of the lease and the present value of future lease payments at that date have been calculated as $25,272,000. Annual rentals of $6m are payable on 30 September each year for five years. The agreement had an implicit interest rate of 5% per annum.

Calculate the current liability for the leased plant in Flash Co’s statement of financial position as at 30 September 20X5 (in whole $).
The solution given to the below question is :
Current liability at 30 Sept X5: $20,535,600 – $15,562,380 = $4,973,220
30 Sept X5: $25,272,000 + Int 1,263,600 – Pymt 6,000,000 = $20,535,600

30 Sept X6: $20,535,600 + Int 1,026,780 – Pymt 6,000,000 = $15,562,380

[miliubh]

Hi,

Thanks, I appreciate the quick response and advice.
Warm Regards,
Millie

[miliubh]

OK I understand Thanks

Apologies I meant to use Ask the AA Tutor forum

[miliubh]

Perfect – Thank you

[miliubh]

Thank you very much

[Author]

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