Scribd
Upload
34 views

A2 Assignment 2

Uploaded by

楊豪
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
34 views

A2 Assignment 2

Uploaded by

楊豪
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

2409 ACCT3120 Assignment 2

Chapter 21 Leases (E21.7)


Macinski Leasing leases a new machine to Sharrer SA. The machine has a cost
of €70,000 and fair value of €95,000. Under the 3-year, non-cancelable
contract, Sharrer will receive title to the machine at the end of the lease. The
machine has a 3-year useful life and no residual value. The lease was signed
on January 1, 2022. Macinski expects to earn an 8% return on its investment,
and this implicit rate is known by Sharrer. The annual rentals are payable on
each December 31, beginning December 31, 2022.

Note:
The ordinary annuity factor for three periods at 8% is 2.57710.
The ordinary annuity factor for three periods at 9% is 2.53130.

Required:
1. Discuss the accounting method that each party to the lease should apply.
2. Prepare an amortization schedule that would be suitable for both the lessor
and the lessee, and which covers all the years involved.
3. Prepare the journal entry at commencement of the lease for Macinski.
4. Prepare the journal entry at commencement of the lease for Sharrer.
5. Prepare the journal entry at commencement of the lease for Sharrer,
assuming that (1) Sharrer does not know Macinski’s implicit rate (Sharrer’s
incremental borrowing rate is 9%), and that (2) Sharrer incurs initial directs
costs of €10,000.

1
Chapter 19 Income Taxes (E19.8)
Jeonbuk Ltd. has two temporary differences between its income tax expense
and income taxes payable. The information is shown below.
2021 2022 2023
Pretax financial income ₩840,000,0 ₩910,000,0 ₩945,000,0
00 00 00
Excess depreciation expense on tax return (30,000,000) (40,000,000) (20,000,000)
Excess warranty expense in financial 20,000,000 10,000,000 8,000,000
income
Taxable income ₩830,000,0 ₩880,000,0 ₩933,000,0
00 00 00
The income tax rate for all years is 40%.

Required:
1. Prepare the journal entry to record income tax expense, deferred income
taxes, and income taxes payable for 2021, 2022, and 2023.
2. Assuming there were no temporary differences prior to 2021, indicate how
deferred taxes will be reported on the 2023 statement of financial position.
Jeonbuk’s product warranty is for 12 months.
3. Prepare the income tax expense section of the income statement for 2023,
beginning with the line “Pretax financial income.”

You might also like