Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Lease, Loan and share issue
- This topic has 1 reply, 2 voices, and was last updated 6 years ago by MikeLittle.
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- November 22, 2017 at 5:22 pm #417460
there are some bullet points in doubt.
At first,
The following trial balance relates to Arthur at 31 December 2013
………………………….Dr………………..Cr
Right of use asset 28000
Leas liability …………………………..28000
Lease payment…….50001) Arthur Ltd entered into a seven year lease of plant on 1 1 2013. The terms of the lease state that Arthur will make annual payments in advance of $5000. The first of these payments was made on 1 1 2013. The present value of the lease payments at 1 1 2013 was $28000 and the effective interest rate in the lease is 8.16%.
In this regard,
my answer is like,
year….bf……..payment….subtotal….interest…..cf
2013 28000 ..(5000)……23000……..1877……24877
2014.24877…(5000)……19877………1622…..21499in my common thought, the finance cost is 1877
………………………………..the NCL is 21499
………………………………..The CL is 3378 made by 24877 minus 21499.this is based on what i was taught.
but the answer is
24877 is split into 19877 and 5000.
19877 is NCL
5000 is CLthere is no additional information.
Subsequent to this,
Thistle Ltd prepares its accounts annually to 30 june and its trial balance for the year ended 30 june 2011, before final adjustments, is as follows:
10% Loan repayable 2019…………………80000
1)interest on the loan is paid annually in arrears on 1 July. As well as the 10% coupon rate, the loan carries a large premium on redemption, giving it an effective interest rate of 12%.
my answer is
date…..bf………….interest……..payment…….cf
2011…80000……..9600………..(8000)……..81600so Finance is 9600
NCL is 81600.but the answer is
CL is 8000
NCL is 81600
Finance is 9600what on earth do they keep considering the payment as the current liability?
ha…. Frankly speaking really feel exhausted keep running into the new pattern that is not seen in the text books and lectures.
every single question has a new concept which is not familiar to me.
Thirdly,
The following trial balance relates to Arthur at 31 December 2013.
Ordinary share capital (0.50c shares)…………………Cr.200,000
1) During the year Arthur made a 1:10 bonus issue. This has Not been accounted for in the trial balance.
their answer is
DrRE 20000
CrSC 20000my answer is
Dr SC 20000
Cr SP 20000this is the bonus issue, so i exactly did what i learnt from the books and theory but always it goes wrong.
it is said that there is no original premium share. that’s why no need to make SP and then
the answer is deducting 20000 from SC and RE.
that textbook answer is not logic and completely no makes sense.
Sir……
sir even in interpretation questions, every single question C has different patterns, therefore it’s impossible to get used to it.
i’ve already read and solved the textbook 6 times and solved the revision kit one time
i’m planning to review the revision kit two times more but i think i don’t have any motivation to review the interpretation questions C parts. i feel like reading and writing for that is wasting time in this situation in which i have only 12 days to take F7 test.
frustrated……sorry to complain that….help me to go over questions above…
there is no person i can talk to about my difficulty. I think that’s why i’m writing useless things here sorry sorry
please don’t close the consecutive replying spaces. Let me ask more Sir… thank you
November 22, 2017 at 7:03 pm #417472In the question Arthur, that 1,877 interest that has accrued through the first year was not paid until 1 January, 2014 so it’s still a current liability as at 31 December, 2013 together with the
Total outstanding is 24,877 of which 1,877 interest is current as also is 3,123 principal giving 5,000 current liability and the balance of 19,877 is long term
I’m going to ask you to cut and paste the remainder of your post and split it into two (or more) separate questions … my mouse is going dizzy moving backwards and forwards up and down the screen
And, in future, please restrict yourself to just one question per post!
OK?
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