QUESTION 1

On 1 July 2019, Sandman entered into two leasing contracts with Easylease Bhd (the lessor). The contracts took effect on the same date. The details are as follows:

Contract 1

An operating lease for mobile lifting equipment for use in the finished goods warehouse, at an annual rental of RM45,000 payable in advance, for a period of six years. The fair value of the equipment is RM300,000 and its useful life is 12 years.

Contract 2

A finance lease for plant, at an annual rental of RM208,000 payable in advance, for a period of five years. The fair value of the plant is RM800,000. The economic life is five years and at the end of the lease period, Sandman will take legal possession of the plant. Depreciation is provided on a straight-line basis, assuming no residual value.

Finance charges are at the rate of 15.15% per annum on the balance of the outstanding obligation.

Required:

a)	Draft the lease schedule computation four years with interest being apportioned according to the actuarial method. (7 marks)
b)	Prepare extracts of the statement of profit or loss of Sandman (lessee) for the year ended 30 June 2021 and the statement of financial position as at that date in accordance with MFRS117 using the actuarial method. (5 marks)