pennyroyal ltd acquired an item of plant under a lease on1 april 2019. an initial payment...

pennyroyal ltd acquired an item of plant under a lease on1 april 2019. an initial payment of N$2 000 000 is paid on 1 april 2019 and the present value of the future lease payments is N$7 092 000. pennyroyal ltd will make four further annual payments of N$2 000 000 paid in advance commencing 1 april 2020, the useful life of the plant is deemed tot be 8 years. pennyroyal ltd will obtain legal title of the plant following the final payment. the interest rate implicit lease is 5%. what is the total charge to appear in the statement of profit or loss for the year ended 31 march 2020?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On 1 April 2019, Brilliant Ltd leased an equipment to Smart Ltd. The lease agreement is...

On 1 April 2019, Brilliant Ltd leased an equipment to Smart Ltd. The lease agreement is non-cancellable with a lease term of three years. The equipment is expected to have an economic life of five years, after which time it will have an expected salvage value of $30,000. There are to be three annual payments of $125,000, the first to be made on 31 March 2020 (i.e. at the end of the year). Included in the $125,000 is $5,000 representing...

FRM Ltd acquired an item of equipment and enters into a non-cancellable lease agreement with FEN...

FRM Ltd acquired an item of equipment and enters into a non-cancellable lease agreement with FEN Equipment Ltd on 1 January 2015. The lease consists of the following:  Date of inception: 1/1/15  Duration of lease: 4 years  Life of leased asset: 5 years  Lease payments (annual):$550 000 (annual) which includes $80 000 for Maintenance and insurance costs per annum.  Guaranteed residual value (Added to final payment): $190 000  Interest rate: 7% Formula for PV...

On 1 March 2019, Heckle Ltd acquired 40% of the voting shares of Jeckle Ltd. Under...

On 1 March 2019, Heckle Ltd acquired 40% of the voting shares of Jeckle Ltd. Under the company’s constitution, each share is entitled to one vote. On the basis of past experience, only 65% of the eligible votes are typically cast at the annual general meetings of Jeckle Ltd. No other shareholder holds a major block of shares in Jeckle Ltd. The financial year of Jeckle Ltd ends on 30 June each year. The directors of Heckle Ltd argue that...

(16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660...

Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2017 the plant was operated for 3000 hours. At 1 July 2017 the plant had a remaining useful life of 7000 hours. On 1 July 2017 the plant underwent a major upgrade costing $234 600. Management believes that this upgrade...

Question 2: (16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for...

Question 2: Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2017 the plant was operated for 3000 hours. At 1 July 2017 the plant had a remaining useful life of 7000 hours. On 1 July 2017 the plant underwent a major upgrade costing $234 600. Management believes that...

On 1 July 2019, CRX Construction Ltd paid $150,000 cash to acquire an item of plant...

On 1 July 2019, CRX Construction Ltd paid $150,000 cash to acquire an item of plant equipment. On this date it was estimated that the item of plant equipment had a useful life of ten years and a residual value of $20,000. CRX Construction Ltd uses the revaluation model to measure items of property, plant and equipment and the straight-line method of depreciation. CRX Construction Ltd has a 30 June reporting date. An independent valuer provided the following fair values...

On 1 July 2019, CRX Construction Ltd paid $150,000 cash to acquire an item of plant...

Mini Ltd leased a machine from Levi Ltd. The lease is for an item of machinery...

Mini Ltd leased a machine from Levi Ltd. The lease is for an item of machinery that, at the inception of the lease, has a fair value of $1,298,674. There is a bargain purchase option that Mini Ltd will be able to exercise at the end of the fifth year for $260,000. The terms of the lease are as follows: • Date of entering lease: 1 July 2019. • Duration of lease: five years. • Life of leased asset: six...

On 1 July 2017, Webster Motors Ltd acquired equipment under a four-year finance lease agreement. The...

On 1 July 2017, Webster Motors Ltd acquired equipment under a four-year finance lease agreement. The present value of the lease payments is $431,213. It has an estimated useful life of five years and an estimated residual value of $31,213. The implicit rate of interest on the lease was 8% per annum. The lease involved five payments, an initial payment of $100,000 and four annual payments on 30 June each year of $100,000. Webster Motors Ltd will retain the equipment...

On 1 July 2017, Webster Motors Ltd acquired equipment under a four-year finance lease agreement. The...

On 1 July 2017, Webster Motors Ltd acquired equipment under a four-year finance lease agreement. The present value of the lease payments is $431,213. It has an estimated useful life of five years and estimated residual value of $31,213. The implicit rate of interest on the lease was 8% per annum. The lease involved five payments, an initial payment of $100,000 and four annual payments on 30 June each year of $100,000. Webster Motors Ltd will retain the equipment at...

Subjects