Simulation (20 minutes) We Move For You (WMFY) is a moving company operating out of Edmonton. The company provides packing and moving services across Western Canada. WMFY also operates a small retail location where customers can book moving services and purchase moving supplies including boxes, packing paper, and tape. The company has a December 31 year end and reports under IFRS. The following documents are attached: Appendix 1: Extracts from internal statement of financial position as at November 30, 2020 Appendix II: Truck lease agreement Complete the tasks in the Excel Task file.I Appendix 1: Extracts from internal statement of financial position as at November 30, 2020 EXTRACTS FROM INTERNAL STATEMENT OF FINANCIAL POSITION as at November 30, 2020 Notes 1 Right-of-use asset - net Lease liability 198,000 225,853 2 1. The right-of-use asset-net account represents the leased retail space. The space is being depreciated on a straight-line basis over the 15-year lease term, which commenced on January 1, 2015. To date, no depreciation has been recognized for 2020, as depreciation is recorded annually. 2. The lease liability represents the obligation related to the leased retail space, The lease agreement requires payments of $2,990 per month, payable the end of the month. The interest rate implicit in the lease is 9% annually. Lease payments to November 30, 2020, have been recorded correctly. N Appendix II: Truck lease agreement THIS LEASE AGREEMENT for a leased truck is made effective as of the 15th day of February 2021 between: United Trucks Ltd. (the lessor") and We Move For You (the "lessee") LEASE TERM The term of the lease will be eight years from the effective date of this agreement. LEASE PAYMENTS Monthly lease payments will be in the amount of $6,000, with payment due on the 15th day of each calendar month. This agreement assumes that the leased vehicle will not be driven in excess of 12,500 kilometres per month. For each kilometre driven in excess of this amount, the lessee will pay the lessor $1 per kilometre. Kilometres driven will be tracked and reported to the lessor each month, with supporting documentation provided. Payments for excess kilometres will be made on a semi-annual basis. The first payment date for excess kilometres, if applicable, will be the 15th day of August 2021. ADDITIONAL COSTS The lessee will pay the lessor $8,500 for costs incurred to deliver the leased vehicle to the lessee's locations. This payment will be due on the 15th day of February 2021. END OF INITIAL LEASE TERM If, at the termination date of this lease agreement, the lessee wishes to purchase the leased vehicle, the lessee may do so at a price of $130,000. Alternatively, the lease may be extended for another four years, at a monthly lease payment of $4,000. Based on the draft work schedule, this vehicle is expected to be driven 15,000 kilometres per month. The truck has a useful life of 12 years Jeanette, Controller Simulation (20 minutes) We Move For You (WMFY) is a moving company operating out of Edmonton. The company provides packing and moving services across Western Canada. WMFY also operates a small retail location where customers can book moving services and purchase moving supplies including boxes, packing paper, and tape. The company has a December 31 year end and reports under IFRS. The following documents are attached: Appendix 1: Extracts from internal statement of financial position as at November 30, 2020 Appendix II: Truck lease agreement Complete the tasks in the Excel Task file.I Appendix 1: Extracts from internal statement of financial position as at November 30, 2020 EXTRACTS FROM INTERNAL STATEMENT OF FINANCIAL POSITION as at November 30, 2020 Notes 1 Right-of-use asset - net Lease liability 198,000 225,853 2 1. The right-of-use asset-net account represents the leased retail space. The space is being depreciated on a straight-line basis over the 15-year lease term, which commenced on January 1, 2015. To date, no depreciation has been recognized for 2020, as depreciation is recorded annually. 2. The lease liability represents the obligation related to the leased retail space, The lease agreement requires payments of $2,990 per month, payable the end of the month. The interest rate implicit in the lease is 9% annually. Lease payments to November 30, 2020, have been recorded correctly. N Appendix II: Truck lease agreement THIS LEASE AGREEMENT for a leased truck is made effective as of the 15th day of February 2021 between: United Trucks Ltd. (the lessor") and We Move For You (the "lessee") LEASE TERM The term of the lease will be eight years from the effective date of this agreement. LEASE PAYMENTS Monthly lease payments will be in the amount of $6,000, with payment due on the 15th day of each calendar month. This agreement assumes that the leased vehicle will not be driven in excess of 12,500 kilometres per month. For each kilometre driven in excess of this amount, the lessee will pay the lessor $1 per kilometre. Kilometres driven will be tracked and reported to the lessor each month, with supporting documentation provided. Payments for excess kilometres will be made on a semi-annual basis. The first payment date for excess kilometres, if applicable, will be the 15th day of August 2021. ADDITIONAL COSTS The lessee will pay the lessor $8,500 for costs incurred to deliver the leased vehicle to the lessee's locations. This payment will be due on the 15th day of February 2021. END OF INITIAL LEASE TERM If, at the termination date of this lease agreement, the lessee wishes to purchase the leased vehicle, the lessee may do so at a price of $130,000. Alternatively, the lease may be extended for another four years, at a monthly lease payment of $4,000. Based on the draft work schedule, this vehicle is expected to be driven 15,000 kilometres per month. The truck has a useful life of 12 years Jeanette, Controller