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I’m still struggling with the non current assets exercises…
* Question 11: I don’t understand why in the answers there are 2 entries crediting lease payments expenses, the first is for of 2k against PPE for 25k and 23k crediting finance lease creditor. The second one is on the entry where the credit of 6k again on crediting lease payments expenses is against 6k from finance lease creditors.
* Question 12-14: Where shall we take the comparison data? I mean for example on question 12 it says that the property was revalued to 60m ( 12 m is related with land) and that the property has 16 years of remaining life, but I don’t see where is the valuation that is on the books so I’m not able to follow the figures in the answers in question 12 applying the same situation to questions 13 and 14.
Thanks for giving me a hand 🙂
From the question “The lease payments in the trial balance represent an initial deposit of $2 million paid on 1 April 2011 and the first annual rental of $6 million paid on 31 March 2012.”
This is a finance lease but the accountant has simply called it “Lease payment” in the trial balance.
The $2m is the deposit and the $6m is the first instalment, both of which need to be deducted from the finance lease creditor account
Questions 12 – 14 are all missing information – they’re on my list of corrections to be made after this December session
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