Essays on Account for Lease Assignment

The paper 'Account for Lease' is a good example of a Finance and Accounting Assignment. According to Greuning (2005), the consolidation process will involve adding assets and liabilities of Beach Ltd to those of Sandy Ltd while excluding inter-company balances. Determination of goodwill on consolidation. Description Dr. $ Cr. $ Leased asset account                       Finance Lease Liability (To record leasing of land and buildings under a finance lease) 4,334,700   4,334,700 Finance Lease Liability                       Cash/Bank a/c (To record the payment of the lease rentals) 600,000   600,000   Requirement (b) General journal entries as at 1st July 2015 – Anderson Ltd Books Description Dr. $ Cr. $ Land and Buildings                       Cash/Bank a/c (To record purchase of land and buildings) 4,334,700   4,334,700 Cash/Bank a/c                       Finance Lease Receivable a/c (To record the receipt of the lease income) 600,000   600,000   Requirement (c) General journal entries as at 30th June 2025 – Lisa Ltd Books Description Dr. $ Cr. $ Profit & Loss a/c                       Finance Lease Liability (To record the finance charge at the end of the period) 500,000   500,000   Requirement (d) General journal entries as at 30th June 2025 – Anderson Ltd Books Description Dr. $ Cr. $ Cash/Bank a/c                       Profit & Loss a/c (To record the lease rental income at the end of the period) 500,000   500,000   Question 2: Account for Income Tax General journal entries to account for tax Description Dr. $ Cr. $ Long service leave                       Profit & Loss a/c (To record the long service leave that has not been paid) 20,000   20,000 Warranty expenses                       Profit & Loss a/c (To record Warranty expenses that have not been paid) 20,000   20,000 Profit & Loss a/c                       Depreciation charge (To record depreciation expenses that have not been accounted for) 20,000   20,000 Profit & Loss a/c                       Income tax expense (To record income tax expense) 96,000   96,000   Question 3: Consolidation According to Greuning (2005), the consolidation process will involve adding assets and liabilities of Beach Ltd to those of Sandy Ltd while excluding inter-company balances. Determination of goodwill on consolidation   $000 Cost of Investment in Beach Ltd. 900 Less: Net assets acquired 700 Goodwill on consolidation 200   Determination of group retained earnings   $000   $000 Pre-acquisition earnings 200 Sandy Ltd. 500 Bal C/d (Balancing figure) 600 Beach Ltd. 300   800   800   The following is the consolidated financial position of the group Sandy Ltd & Beach Ltd Consolidated Statement of financial position as at 30th June 2015   $000 $000 ASSETS     Non-Current Assets     Land   1,000 Property, Plant & Equipment 1,600   Accumulated depreciation (613) 987 Goodwill   200 Total Non-Current Assets   2,187 Current Assets     Cash 120   Accounts receivable 100   Inventory 263   Total Current Assets   483 Total Assets   2,670 Liabilities & Equity     Current Liabilities     Accounts payable 110   Dividends payable 150   Total Current Liabilities   260 Non-Current Liabilities     Loan   810 Total Liabilities   1,070 Shareholders’ Equity     Share capital 1,000   Retained earnings 600   Total Shareholders’ Equity   1,600 Total Liabilities & Equity   2,670  

Reference

Greuning, H. V., 2005. International financial reporting standards: a practical guide. New York: Routledge.