1. Gabriel Ltd leases a siphoning filter from Logan Ltd. The terms of the lease is to commence on 1 July 2020. The lease is to last for 4 years. Lease payments are to be made annually in arrears. The first payment to be made on 30 June 2021. Each lease payment is to amount to $5,000. At the end of the lease, the expected residual value of the filter is $3000. Gabriel Ltd guarantees $2000 of the residual value. The interest rate implicit in the lease is 4%. At the start of the lease, at what amount should Gabriel Ltd record the right to use asset in their books?

a.$19,859

b.$20,585

c.$18,149

d.$20,714

2. White Ltd owned a boat that has an economic useful life of 6 years as at 1 July 2020. On 1 July 2020 the company leased one boat to River Ltd for three years. White Ltd recognised this lease as a finance lease and recorded a lease receivable valued at $61,507. In the lease agreement, River Ltd agreed to guarantee $4,000 residual value, $1,000 less than what White had estimated. The lease payment is $20,000. Lease payments are to be made annually and in advance. The interest rate implicit in the lease is the same for both companies at 5%. What is the amount of River Ltds lease liability on the commencement day of the lease?

a.$40,644 b.$60,644 c.$61,507 d.$41,507

3.White Ltd owns a boat that has an economic useful life of 6 years as at 1 July 2020. On 1 July 2020 the company leases the boat to River Ltd. The right to use asset recorded by River Ltd is valued at $61,507. The lease payment id $20,000 for three years. Lease payments are to be made annually and in advance. River Ltd guarantees the $5,000 residual value of the boat. What is the amount of River Ltds annual depreciation expense?

a.$18,836 b.$9,418 c.$13,836 d.$12,169

4.According to AASB16, which of these is NOT a valuation model which can be applied to any type of leased asset?

a. The cost model b. the fair value model c.The revaluation model d.The lower of cost and net realisable value model

5. According to AASB16, at the commencement date of a lease, how is the lessee to measure the lease liability?

a. The fair value of the leased asset

b. The present value of all lease payments over the life of the lease

c. The present value of all lease payments to be made after the commencement date

d. The present value of the cash flows to be generated by the leased asset