On 30 June 2020, Kerry Ltd leased a motor vehicle to Perry Ltd. Kerry Ltd had purchased the motor vehicle on that day for its fair value of $136 692. The lease agreement cost Kerry $3318 to have drawn up and requires Perry to reimburse Kerry for annual insurance costs of $3000. The amount recorded as a lease receivable by Kerry Ltd at the inception of the lease is:

Select one:

None of these

$139 692

$136 692

$143 010

$140 010

Crown Ltd sells furniture on 12 months' interest free terms to qualifying customers. On 30 June 2019, Crown Ltd sells $20 000 of furniture to Ms Smith, payable by 30 June 2020. The appropriate interest rate for this transaction is determined to be 6% per annum. The present value of the $20 000 to be received in one year's time is $18 868. The journal entry to be recorded by Crown Ltd at 30 June 2019 is:

Select one:

Dr Bank $20,000

Cr Receivable $20,000

None of these

Dr Receivable $20,000

Cr Sales revenue $18,868

Cr Interest revenue $1,132

Dr Receivable $20,000

Cr Sales revenue $18,868

Cr Deferred interest $1,132

Dr Receivable $20,000

Cr Sales revenue $20,000

Telstra provides a bundled-service package to Smith for $8000 upfront. The service package includes:

Online advice

'on-call' advice

Web database access for a 1-year period.

If each service was sold separately to Smith the fees would be:

Up-front advice: $1600

On-call advice:$7200

Database access:$2400

The revenue that would be recorded by Telstra at the commencement of the agreement is (rounded to the nearest whole dollar):

Select one:

$1143

$2856

$8000

None of these

$4000

Coolongolook Ltd reported the following information at 30 June 2020:

Accounts balances as at 1.7.2019 are as follows

Asset revaluation Surplus36,000

Retained earnings20,000

During the year ending 30 June 2020, Coolongolook Ltd made the following transactions.

Made after tax profit of $50,000

Dividend declared not yet paid on 30 June 2020 $10,000

Net increase in Land revaluation $40,000 (ignore tax effect)

What would be the correct equity balances shown in the Statement of Changes in Equity as at 30 June 2020?

Select one:

Asset revaluation surplus $50,000

Retained earnings $60,000

Asset revaluation surplus $50,000

Retained earnings $70,000

Asset revaluation surplus $76,000

Retained earnings $60,000

Asset revaluation surplus $76,000

Retained earnings $70,000

None of these

Tom Limited accrued $40 000 for employees' long service leave in the year ended 30 June 2018. This item will not be tax deductible until it is paid in approximately 5 years' time. Assuming the company tax rate is 30%, Tom Limited must record the following tax effect as a balance date adjustment:

Select one:

DR Deferred tax liability $12 000

CR Deferred tax asset $12 000

None of these

DR Deferred tax asset $12 000.

CR Deferred tax liability $12 000

Chilli Pepper Ltd depreciate its machinery using 10 years useful life but the useful life for such asset for tax purposes is 15 years. Chilli Pepper Ltd purchased machinery on 1 July 2018 for $500,000. Which one of the following is correct?

Assume a Tax rate of 30%.

Select one:

Taxable temporary difference as at 30 June 2020 is $43,333

None of these

Taxable temporary difference as at 30 June 2020 is $16,667

Deductible temporary difference as at 30 June 2020 is $33,333

Taxable temporary difference as at 30 June 2020 is $33,333

Clooney Limited has a machine which cost $600 000 and has been depreciated by $200 000 to date. The accumulated depreciation for tax purposes is $360 000 and the company tax rate is 30%. The tax base of this asset is:

Select one:

None of these

$120 000

$108 000

$240 000

$400 000

Blesh Ltd classifies interest paid and interest received as operating activities. Blesh Ltd had the following cash flows during the year ended 30 June 2019:

Net profit after tax for the year

$75 000

Repayment of borrowings

$30 000

Opening retained earnings balance

$30,000

Closing retained earnings balance

$17,000

All dividends declared have been paid by 30 June 2019. What is the net cash inflow from financing activities?

Select one:

($118,000) cash outflow

($13,000) cash outflow

($30,000) cash outflow

($43,000) cash outflow

None of these

Top of Form

The following relates to Enfield Ltd's carrying amounts and tax base as at 30 June 2020.

Accounts

Carrying amount

Tax base

Liabilities

Trade payable

12,000

12,000

Provision for Annual leave

4,000

0

Income received in advance

2,000

0

Assume a Tax rate of 30%.

How much is deferred tax assets and deferred tax liabilities as at 30 June 2020?

Select one:

DTA $1,800; DTL $600

DTA $1,800; DTL $0

None of these

DTA $0; DTL $1,800

DTA $600; DTL $1,800

Clear my choice

Delighted Telecommunication Ltd provides a bundled-service package to their customers for $2,000 upfront. The service package includes:

upfront advice

'on-call' adviceprovided over one year

database access for a 1-year period.

If each service was sold separately, the fees would be:

Up-front advice:$400

On-call advice:$1,800

Database access:$600

What will be the revenue recorded by Delighted Telecommunication Ltd at the commencement of the agreement is (rounded to the nearest whole dollar):

Select one:

$286

$2,000

None of these

$714

$400

Master Ltd operates in the exploration industry. During its current financial year, Master Ltd contaminated land in a country where there is no environmental legislation. The estimated cleaning fee is $27,000 as per quotation received from a cleaning company. Master Ltd has no environmental policy and never cleaned up contamination resulting from previous activities. Its current financial year ends on 30 June 2020.

Which one of the following statement is correct per AASB137?

Select one:

Present obligation fails as there is no environmental legislation.

Probability of economic outflow of resources can be determined as it is probable that there will be an economic outflow of resources to clean up the contamination.

As the cost is measured as best estimate reliably, the liability must be disclosed as a provision.

Even though there is a present obligation from a past event, the cost cannot be measured reliably, it must be disclosed as a contingent liability.

None of these

For operating cash flows, the presentation method that separates gross cash inflows from cash outflows is the:

Select one:

None of these

equity method

direct method

offset method

indirect method

Clive Limited had the following deferred tax balances at reporting date:

Deferred tax assets$32 000

Deferred tax liabilities$55 000

Effective from the first day of the next financial period, the company rate of income tax was reduced from 40% to 35%. The adjustment to income tax expense to recognise the impact of the tax rate change is:

Select one:

DR$2 875

CR $3 286

DR$3 286

None of these

CR$2 875

Barry Limited and Allen Limited enter into a finance lease agreement with the following terms:

lease term is 4 years

estimated economic life of the leased asset is 5 years

4 annual rental payments of $15 000 each payable in advance

residual value at the end of the lease term is not guaranteed by the lessee

interest rate implicit in the lease is 8%.

The journal entry recorded by the lessor when the first lease payment is received would be:

Select one:

None of these

Dr Cash $15,000

Cr Reimbursement revenue 15,000

Dr Cash $15,000

Cr Lease receivable $15,000

Dr Cash $15,000

Cr Interest revenue $5,175

Cr Lease receivable $9,825

Dr Lease receivable $15,000

Cr Asset $15,000

Top of Form

he following information was extracted from the records of Blue Limited:

Opening balance of machinery: $840 000

Closing balance of machinery: $960 000

Cost of new machinery: $240 000

Proceeds from sale of machinery: $48 000

(Cost $80 000; Carrying amount $40 000)

Dunkirk Limited has an asset with a carrying value of $120 000. The tax base of this asset is $100 000. The tax rate is 30%. The deferred tax item to be recognised by Dunkirk Limited is

Select one:

Deferred tax liability of $6000

None of these

Deferred tax asset of $6000

Deferred tax liability of $20 000.

Deferred tax asset of $20 000.

Round Ltd entered into a services contract with Morning Ltd on 1 August 2018. Morning Ltd paid Round Ltd the full fee of $100,000 in cash on 1 August 2018. Round Ltd have estimated that the services rendered are 70% completed as at 30 June 2019.

Which one of the following is the correct journal entry on 30 June 2019 for the transaction above?

Select one:

Dr Service revenue $30,000

Cr Deferred revenue $30,000

None of these

Dr Deferred revenue $30,000

Cr Service revenue $30,000

Dr Deferred revenue $70,000

Cr Service revenue $70,000

Dr Account receivable $100,000

Cr Deferred revenue $70,000

Cr Service revenue $30,000

Which of the following is an appropriate journal entry for the initial recognition by a financier lessor of a finance lease arrangement?

Select one:

DRLease receivable: CR Lease liability

DRLease receivable: CR Asset

DRLeased asset: CR Cash

DRLeased asset:CR Cash/accounts payable

None of these

contract for the rendering of services is entered into on 1 May 2020. The services are delivered continuously over a 1-year period commencing on 15 May 2020. The buyer pays for all the services on 30 May 2020.

How should the revenue be recognised?

Select one:

30 May 2020

Over the year commencing 30 May 2020 on a straight-line basis

15 May 2020

None of these

Over the year commencing 15 May 2020 on a straight-line