Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2021, Sunland Ltd., which uses IFRS 16, entered into an eight-year lease agreement for a conveyor machine. Annual lease payments are $33,600

On January 1, 2021, Sunland Ltd., which uses IFRS 16, entered into an eight-year lease agreement for a conveyor machine. Annual lease payments are $33,600 at the beginning of each lease year, which ends December 31, and Sunland made the first payment on January 1, 2021. At the end of the lease, the machine will revert to the lessor. However, conveyor machines are expected to last for only eight years and have no residual value. At the time of the lease agreement, conveyor machines could be purchased for $193,000 cash. Equivalent financing for the machine could have been obtained from Sunlands bank at 11%. Sunlands fiscal year coincides with the calendar year. Sunland uses straight-line depreciation for its conveyor machines. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

Prepare the journal entries on Sunland Ltd.s books to (1) reflect the signing of the lease agreement, (2) record the payments and expenses related to this lease for the years 2021 and 2022, and (3) make any adjusting journal entries at its fiscal year ends of December 31, 2021 and 2022. Sunland does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

1/1/2112/31/211/1/2212/31/22

(To record inception and payment of lease.)

1/1/2112/31/211/1/2212/31/22

(To record depreciation expense.)

1/1/2112/31/211/1/2212/31/22

(To record interest.)

1/1/2112/31/211/1/2212/31/22

(To record lease payment.)

1/1/2112/31/211/1/2212/31/22

(To record depreciation expense.)

1/1/2112/31/211/1/2212/31/22

(To record interest.)

Save for Later

Attempts: 0 of 2 used

Submit Answer

(e)

Prepare a partial comparative statement of financial position at December 31, 2022, and 2021, for all of the accounts related to this lease for Sunland Ltd. Be specific about the classifications that should be used.

Sunland Ltd. Statement of Financial Position (partial) December 31For the Month Ended December 31For the Year Ended December 31
2022 2021
Total Shareholders' EquityTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentTotal Current AssetsShort-Term InvestmentsCurrent AssetsNon-Current AssetsShareholders' EquityCurrent LiabilitiesTotal Current LiabilitiesNon-Current LiabilitiesIntangible AssetsTotal Intangible AssetsTotal AssetsLong-Term InvestmentsShort-Term LiabilitiesProperty, Plant and Equipment
Shareholders' EquityIntangible AssetsNon-Current LiabilitiesCurrent LiabilitiesTotal Property, Plant and EquipmentTotal AssetsTotal Intangible AssetsProperty, Plant and EquipmentShort-Term InvestmentsCurrent AssetsTotal Current LiabilitiesTotal Shareholders' EquityTotal Current AssetsLong-Term InvestmentsTotal Liabilities and Shareholders' EquityNon-Current AssetsShort-Term Liabilities
$ $
AddLess:
Intangible AssetsTotal Intangible AssetsTotal Shareholders' EquityShareholders' EquityTotal Current LiabilitiesTotal Current AssetsCurrent AssetsNon-Current LiabilitiesShort-Term LiabilitiesNon-Current AssetsLong-Term InvestmentsTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentProperty, Plant and EquipmentTotal AssetsCurrent LiabilitiesShort-Term Investments
Current AssetsShort-Term InvestmentsCurrent LiabilitiesTotal AssetsNon-Current LiabilitiesShareholders' EquityIntangible AssetsTotal Property, Plant and EquipmentTotal Liabilities and Shareholders' EquityShort-Term LiabilitiesProperty, Plant and EquipmentTotal Current AssetsTotal Shareholders' EquityTotal Intangible AssetsTotal Current LiabilitiesLong-Term InvestmentsNon-Current Assets

Save for Later

Last saved 19 seconds ago.

Saved work will be auto-submitted on the due date.

Attempts: 0 of 2 used

Submit Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Social Media A Governance And Risk Guide

Authors: Peter R. Scott, J. Mike Jacka

1st Edition

1118061756, 978-1118061756

More Books

Students also viewed these Accounting questions

Question

define the term outplacement

Answered: 1 week ago

Question

describe the services that an outplacement consultancy may provide.

Answered: 1 week ago