Question 24

Whiterun Ltd leases a boat to Riverwood Ltd. The lease has the following terms: The lease is for a three year period, commencing 1 July 2020. The lease payments are to be made in advance, with the first payment on 1 July 2020. Each lease payment is to be for $20 000. The expected residual value of the boat is $5 000. Riverwood Ltd guarantees $4 000 of the residual value. The interest rate implicit in the lease is 5%. Assuming that Whiterun Ltd does not incur any initial direct costs and that the lease is a finance lease, what is the amount of the lease receivable which they should recognise at the start of the lease?

		$57 188
		$58 784
		$60 644
		$61 507

Question 25

Commander Ltd leased a ship to Shepard Ltd. The ship was leased for a term of ten years. On the day before the lease commencing, Commander Ltd had bought the ship for $10 000 000. The legal fees incurred by Commander Ltd to draw up the lease agreement amounted to $500 000. Assuming that the lease is a finance lease, what is the amount of the lease receivable that Commander Ltd should recognise at the start of the lease?

		$10 000 000
		$9 500 000
		$10 500 000
		There has not been enough information provided to accurately determine this

30

Gordon Ltd leases a mining helicopter from Freeman Ltd. The right to use asset recorded by Gordon Ltd is valued at $329 133. The lease payment is $100,000 for three years. Lease payments are to be made annually and in advance. Gordon Ltd guarantees the $50 000 residual value of the helicopter. Both Gordon Ltd and Freeman Ltd have the same interest rate implicit in the lease as 5%. What is the amount of Gordon Ltd's annual depreciation expense?

		$93 044
		$76 378
		$109 711
		$143 044

31

Gordon Ltd leases a mining helicopter from Freeman Ltd. The right to use asset is valued at $329 133. The lease payment is $100,000 for three years. Gordon Ltd guarantees the estimated residual value of the helicopter in full. Both Gordon Ltd and Freeman Ltd have the same interest rate implicit in the lease as 5%. What amount would Freeman Ltd use to record the lease receivable in their books?

		$329 133
		$229 133
		$429 133
		$300 000