1) 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

2). Whiterun 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 the boat to Riverwood Ltd. In the lease agreement, Riverwood Ltd agreed to guarantee $4,000 residual value. The lease payment os $20,000 for three years. Lease payments are to be annually and in advance. The interest rate implicit in the lease is the same for both companies at 5%. What is the amount of Riverwood Ltds lease liability on the commencement day of the lease?

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

3).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

4). If, as a result of the adoption of the latest revision of AASB16, a lessee recognises a lease on their balance sheet for the first time, which of the following is NOT a likely consequence of doing so?

a.Increased assets b.Increased annual expenses c.Increased liabilities d.Increased annual revenues

5). According to AASB16, if a lessee has either leased an asset under a short term lease, or leased an asset of low value, what accounting treatment should the lessee adopt in relation to the lease?

a. The lessee must recognise a right of use asset and a lease liability

b.The lessee can either recognise a right of use and a lease liability, or expense the lease payments over the life of the lease

c. The lessee must expense the lease payments over the life of the lease

d. The lessee need not account for any of the lease transactions

6). 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

7). According to AASB16, which type of lease results in the lessor recognising amongst other things, a cost of sale expense?

a. A finance lease involving a financier lessor

b. An operating lease involving a financier lessor

c. A finance lease involving a manufacturer or dealer lessor

d. An operating lease involving a manufacturer or dealer lessor

8). According to AASB16, a contract is, or contains, a lease under what circumstances?

a. If it involves one party relinquishing ownership of an asset

b. If it results in an increment in the equity of the lessor entity

c. If it leads to an increase in expenses of the lessee entity for more than one reporting period

d. If it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

9). If an option is described as in-the-money, what does that mean?

A. The option was purchased instead of being issued at no cost

b. The holder of the option is better off exercising the option, compared to making the same transaction on the stock exchange

c. The holder of the option is worse off exercising the option, compared to making the same transaction on the stock exchange

d. The fair value of the option, as determined using the Black-Scholes method, is greater than the underlying security.