Question
RDBS purchased an asset costing 1,000,000 at the beginning of year 2018. It has an expected life of five years and no residual value. The
RDBS purchased an asset costing 1,000,000 at the beginning of year 2018. It has an expected life of five years and no residual value. The asset will be depreciated on a straight line basis in line with the companys policy. The following are the allowances for tax depreciation.
Year | |
2018 | 300,000 |
2019 | 250,000 |
2020 | 200,000 |
2021 | 150,000 |
2022 | 100,000 |
RDBS has recently entered into a lease contract with CKK Ltd. The details of the lease are follows: The lease commence on 1st January 2021. The cost of the lease is 100,000. The lease has 5years lease term. Rentals of 26,000 per annum are in payable advance, each 1January. Interest rate per annum is 15.15%.
b) Show the balance sheet figure for Net Investment in Finance Lease in the books of RDBS for years 1- 5, analysed between amounts receivable within one year and amounts receivable after one year [10 marks]
c) Discuss the reason behind the use of different rates of exchanges in the translation of the financial statements of overseas companies [5 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started