Angelica S. Rubios: Problem 10-19
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Angel RubiosAngelica S. Rubios: Problem 10-19
Uploaded by
Angel RubiosAngelica S.
Rubios
Problem 10-19
1. What is the lease liability on December 31, 2020?
a. 1,352,000
b. 1,152,000
c. 1,067,200
d. 1,552,000
PV of lease payment 1,352,000
Annual payment (200,000)
Lease liability - 12/31/2020 1,152,000
2. What is the lease liability to be reported as noncurrent on December 31, 2020?
a. 1,215,920
b. 1,090,240
c. 1,067,200
d. 973,920
Lease liability - 12/31/2020 1,152,000
Payment at year end 200,0000
Interest (1,152,000 * 10%) (115,200) (89,800)
Lease liability - noncurrent 1,067,200
3. What is the interest expense for 2020?
a. 200,000
b. 115,200
c. 106,720
d. 0
Interest expense (1,152,000 * 10%) 115,200
4. What is the depreciation for 2020?
a. 135,200
b. 115,200
c. 67,200
d. 20,000
Depreciation (1,352,000 / 20) 67,500
Problem 10-20
1. What amount should be reported as lease liability on December 31, 2021?
a. 3,500,000
b.2,431,500
c.2,283,200
d.2,485,000
PV of lease term 3,165,000
Payment - 12/31/2020 (500,000)
Balance - 12/31/2020 2,665,000
Payment on 12/31/2021 500,000
Interest (2,665,000 * 10%) (266,500) (233,500)
Lease liability - 12/31/2021 2,431,500
Problem 10-22
1. What amount should be included in current liabilities on December 31, 2020 in relation to
the lease?
a. 65,000
b. 85,000
C. 115,000
d 200,000
Lease liability - 12/31/2020 1,350,000
First payment - 12/31/2020 (200,000)
Lease liability - 12/31/2020 1,150,000
Second payment - 12/31/2021 200,000
Interest (1,150,000 * 10%) (115,000) (85,000)
Lease liability - 12/31/2021 1,065,000
Lease liability - 12/31/2020 1,150,000
Current portion - 12/31/2021 (85,000)
Noncurrent portion 1,065,000
Problem 10-23
1. What is the total amount of lease liability including interest should be recognized in the
statement of financial position on December 31, 2020?
a. 4,578,000
b. 4,641,000
c. 700,000
d. 0
Lease liability - 1/1/2020 4,900,000
Payment - 1/1/2020 (700,000)
Lease liability - 12/31/2020 4,200,000
Interest (4,200,000 * 9%) (378,000)
Lease liability - 12/31/2020 4,578,000
Problem 10-27
1.In recording the December 31, 2021 payment, by what amount should he lease liability be
reduced?
a. 270,000
b. 230,000
c. 225,000
d. 170,000
Lease liability 2,700,000
First payment (400,000)
Lease liability 2,300,000
Second payment - 12/31/2021 400,000
Interest (2,300,000 * 10%) (230,000)
Reduction of Lease liability - 12/31/2021 170,000
2.What is the interest expense for 2021?
a. 270,000
b. 230,000
c. 200,000
d. 0
Interest (2,300,000 * 10%) 230,000
3.What is the lease liability on December 31, 2021?
a. 2,700,000
b. 2,300,000
c. 2,130,000
d. 1,900,000
Lease liability - 12/31/2020 2,300,000
Reduction of Lease liability (170,000)
Lease liability - 12/31/2021 2,130,000
Problem 10-28
What is the cost of the actual purchase of the leased equipment?
a: 1,850,000
b. 1,600,000
c. 3,150,000
d. 1,550,000
Right of use asset 4,000,000
Acc dep (2,450,000)
CA 1,550,000
Payment 1,600,000
Total 3,150,000
Lease liab (1,300,000)
Actual purchase 1,850,000
Problem 10-30
1. What is the initial lease liability?
a. 4,514,000
b. 4,310,000
c. 4,614,000
d. 4,764,000
PV of rental (1,000,000 * 4.31) 4,310,000
2. What is the cost of right of use asset?
a. 4,814,000
b. 4,810,000
c. 4,710,000
d. 4,610,000
Lease liability 4,310,000
Initial direct cost 350,000
Lease incentive received (150,000)
Lease bonus 100,000
Cost of restoration 200,000
Cost or right of use asset 4,810,000
3. What is the annual depreciation?
a. 912,800
b. 588,750
c. 962,000
d. 601,250
Annual depreciation (4,800,000 / 5) 962,000
4. What total amount should be reported as interest expense for the current year?
a. 344,800
b. 205,984
c. 264,800
d. 276,800
Date Payment Interest Principal Lease liability
1/1/2020 4,310,000
1/1/2020 1,000,000 1,000,000 3,310,000
1/1/2021 1,000,000 264,800 735,200 2,574,800
1/1/2022 1,000,000 205,984 794,016 1,780,784
