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.