StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Journal Entries and Lease Accounting - Math Problem Example

Cite this document
Summary
The paper  “Journal Entries and Lease Accounting”  is a cogent example of a finance & accounting math problem.    The cost of the goods is calculated periodically whereby the cost of closing stock per commodity is calculated by averaging the two costs of purchasing. i.e. (600+800)/ To get the new cost per commodity to be sold i.e. $ 700…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER98.5% of users find it useful

Extract of sample "Journal Entries and Lease Accounting"

The paper  “Journal Entries and Lease Accounting”  is a cogent example of a finance & accounting math problem.    The cost of the goods is calculated periodically whereby the cost of closing stock per commodity is calculated by averaging the two costs of purchasing. i.e. (600+800)/ To get the new cost per commodity to be sold i.e. $ 700.

Journal entries

               

Date

Description

Folio

DR in $

 

CR in $

           

1-Jul-12

Rent

1

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Aug-12

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Sep-12

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Oct-12

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Nov-12

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Dec-12

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Jan-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Feb-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Mar-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Apr-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-May-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

       

1-Jun-13

Rent

 

              10,000

     

Bank

     

        10,000

 

for rent payment

                   

 

 

Journal

                 

 

Date

description

Folio

Dr

 

Cr

 

30-Sep-12

Chuck

 

1800

       

Morgan

 

                3,000

       

Bank

     

           4,800

   

For payment of labor work

       


Q2. Journal entry for labor

Q3

 

Journal

                 

 

Date

description

Folio

Dr  $

 

Cr $

 

1-Oct-12

Manufacturing

 

2000

       

Designer

 

              20,000

       

Installation

 

                    500

       

Delivery

 

                    500

       

Creditors

     

        23,000

   

Recording for Invoices received

         

10-Oct-12

Manufacturing

 

1900

       

Designer

 

              20,000

       

Installation

 

                    500

       

Delivery

 

                    500

       

Discount

 

                    100

       

Bank

     

        22,900

   

Manufacturing

     

              100

   

Payment for purchases

       

Q4

 

Journal

                 

 

Date

description

Folio

Dr  $

 

Cr $

 

10-Oct-12

Purchases

 

240,000

       

Bank

     

      240,000

   

For payments of purchases

         

2-Oct-12

Bank

 

           100,000

       

Sales return

 

           100,000

       

Sales

     

      200,000

   

Recording of sales and sales return

         

20-Oct-12

Purchases

 

           300,000

       

Bank

     

      300,000

   

Recording of purchases of goods

         

1-Dec-12

Bank

 

           750,000

       

Sales

     

      750,000

   

Recording of sales of goods to UWS

         

1-Dec-12

Delivery expenses

 

                1,000

       

Cash

     

           1,000

   

To record delivery expenses

       

Q5
Cost of goods sold (COGS) = Opening Stock + Purchases –Closing Stock

Opening stock       0
Add:   Purchases     240,000
Less: closing stock (200000)
 40,0
Opening Stock            200,000
Add:  Purchases           300,000
Less: Closing Stock     175,000
Cogs                            325,000
Total Cogs by year = (325,000 +40,000)

                                 =   365,000

The cost of the goods is calculated periodically whereby the cost of closing stock per commodity is calculated by averaging the two costs of purchasing. i.e. (600+800)/
To get the new cost per commodity to be sold i.e. $ 700.

Q6.
The international accounting standards number 17 gives us a good insight into the types of leases in the market. The IAS 17 gives only two types of leases; these are the finance lease and operating lease. IAS 17 goes ahead and differentiates the two types of leases using the substance over form as the most factor in giving the distinction; Finance lease is when all substance risk is transferred to the lessee at the point of signing out the lease agreement while operating lease is a situation where the substantial risk remains with the owner of the property to be leased out. The control of the car in question remains with the owner through the benefits will go to the company. The risk remains with the owner of the car hence we can conclude that the lease is an operating lease. (Bath, 2006)

The lease is only for 3 years while the car life is 8years, this still qualifies this lease to be an operating lease although the control of the asset is the most crucial aspect in determining the type of the lease.

Q7. Lease calculation
Cost of the car $ 40,407

 The used value of the car is 5000+ (800*3)
 =    29000/3
Monthly payment = 9667 annually
 =   (40407+29000)*10%
 = 6947

Total annual payment = 6947+9667
= 16608. Lease payment annually.

Q8. Straight-line method of depreciation is given by
Dpn = (C-R)/N
Where. Dpn – is the annual depreciation
C - Cost of the Asset
R- Residual Value
N- Expected life of the asset.
Cost of the coach $ 20,000
Residual value   $ 0
Expected life 6 years
Dpn = (20000-0)/6
 = $ 333
Cost of the car $ 40,407
Residual value $ 0
Expected life period 8 years
Dpn =$ (40407-0)/8
= $ 5051

Journal

               

Date

description

Folio

Dr  $

 

Cr $

30-Jul-13

depreciation of couch

 

333

     

Couch

     

        19,667

 

To record depreciation of asset couch

     

30-Jul-13

         

 

depreciation of car

 

                5,051

     

car

     

        35,356

 

 

 

 

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Journal Entries and Lease Accounting Math Problem Example | Topics and Well Written Essays - 750 words, n.d.)
Journal Entries and Lease Accounting Math Problem Example | Topics and Well Written Essays - 750 words. https://studentshare.org/finance-accounting/2039139-accounting
(Journal Entries and Lease Accounting Math Problem Example | Topics and Well Written Essays - 750 Words)
Journal Entries and Lease Accounting Math Problem Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/finance-accounting/2039139-accounting.
“Journal Entries and Lease Accounting Math Problem Example | Topics and Well Written Essays - 750 Words”. https://studentshare.org/finance-accounting/2039139-accounting.
  • Cited: 0 times

CHECK THESE SAMPLES OF Journal Entries and Lease Accounting

BrightBooks Project - Accounting for Decision Making

… The paper “BrightBooks Project - accounting for Decision Making” is an informative example of a finance & accounting math problem.... The paper “BrightBooks Project - accounting for Decision Making” is an informative example of a finance & accounting math problem.... According to the generally accepted accounting standards (GAAP's), only transactions relating to the current accounting period are to be reflected in the financial statements....
37 Pages (9250 words) Math Problem

International Corporate Reporting

… The paper "International Corporate Reporting" is a perfect example of a finance and accounting assignment.... The paper "International Corporate Reporting" is a perfect example of a finance and accounting assignment.... Considering the accounting period concept of accounting, the value of the property three years ago will not be its value for this accounting period.... ith reference to international accounting standard 2, treatment for inventories is recognized....
6 Pages (1500 words) Assignment

Accounting Information System - Pressure Hydraulics

… The paper "accounting Information System - Pressure Hydraulics" is a great example of a finance and accounting assignment.... The use of traditional accounting and bookkeeping approaches, which are manual, leads to delays in updating of information and processing of sales and orders.... The paper "accounting Information System - Pressure Hydraulics" is a great example of a finance and accounting assignment....
16 Pages (4000 words) Assignment

Cash Basis and Accrual Basis as Methods of Financial Reporting

djusting entries and effect on financial statements (page 162) ... … The paper 'Cash Basis and Accrual Basis as Methods of Financial Reporting" is a good example of a finance and accounting assignment.... rdquo; The paper 'Cash Basis and Accrual Basis as Methods of Financial Reporting" is a good example of a finance and accounting assignment.... Prepare an income statement for the year ended 30 June 2014 using accrual accounting....
4 Pages (1000 words) Assignment

How to Do Weighted Averages in Inventory

… Being cost of Couch acquisition paid(Cater, 2006).... uestion 4$$Date ParticularsDrCr1/October 2012Purchases240 000Bpple 240 000Being credit purchases of 300 iSLEEPS @800 from Bpple2/October 2012UNE200 000Sales 200 000Being Credit sales of 100 iSLEEPS Being cost of Couch acquisition paid(Cater, 2006)....
4 Pages (1000 words) Math Problem

Financial Auditing and Ethics

… The paper "Financial Auditing and Ethics" is a wonderful example of a report on finance and accounting.... The paper "Financial Auditing and Ethics" is a wonderful example of a report on finance and accounting.... Mary is single-handedly developing procedure manuals and policies for the accounting department.... Multiple entries being made by different people make it hard to verify and opens room for fraud and errors....
8 Pages (2000 words)

Leases and Liabilities

… The paper 'Leases and Liabilities' is a great example of a FInance and accounting Assignment.... nbsp; The paper 'Leases and Liabilities' is a great example of a FInance and accounting Assignment.... Lastly an organization can upgrade equipment to the latest technologies by modifying the lease as opposed to buying on the same.... eases allow an organization to spread the total asset leasing cost across the lease period....
6 Pages (1500 words) Assignment

Need for a Public Sector-Specific Accounting System in Australia

… The paper 'Need for a Public Sector-Specific accounting System in Australia" is a perfect example of a finance and accounting case study.... nbsp;As from the early 1980s, there has been a lot of transformation in public sector financial reporting and accounting.... New Zealand and Australia led this, and one major feature of the new trend was the abandonment of cash accounting in favour of a commercial accrual approach (Hooks & Tooley 2007) The paper 'Need for a Public Sector-Specific accounting System in Australia" is a perfect example of a finance and accounting case study....
6 Pages (1500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us