The information below is for both Questions 6 and 7. Small Ltd signed a 3-year contract with Big Ltd for the use of a machinery on 1 July 2022 with the option to purchase the machinery at the end of the lease term. It is reasonably expected that Small Ltd will exercise the bargain purchase option. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable) 3 years Expected useful life of the machinery 8 years Expected residual value of the machinery $5,000 Residual value guaranteed $40 000 Expected fair value of the machinery at the end of lease term $50 000 Bargain purchase price at the end of lease term $60 000 Net initial directly attributable costs (paid at 1 July 2022) $10 000 Initial lease payment (paid at 1 July 2022) $30 000 Annual lease payment (paid in arrears at 30 June) $80 000 Annual maintenance & insurance included in the annual lease payment $10 000 Interest rate implicit in the lease 10% p.a. Required: How much initial lease liability that Small Ltd. should recognise on 1 July 2022 (rounded to the nearest dollar) in accordance with the requirements of AASB 16 Leases?

ABC Ltd signed a 4-year contract with Comp Ltd for the use of a customised machinery on 1 July 2022.ABC Ltd intends to return the asset at the end of the lease term. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable) 4 years Expected useful life of the machinery 6 years Expected fair value of the machinery at the end of lease term $30 000 Residual value guaranteed $50 000 Bargain purchase price at the end of lease term $60 000 Net initial directly attributable costs (paid at 1 July 2022) $8 000 Annual lease payment (paid in arrears) $70 000 Interest rate implicit in the leaseWhat is the amount to be recorded as a Non-current Lease Liability in the books of ABC Ltd that is in accordance with AASB16 Leases on 30 June 2023? Group of answer choices $174,080 $189,106 $138,017 $121,488

On 1 July 20X5, Bow Ltd leased equipment to Tie Ltd.  The terms of the contract are as follows:Lease term10 yearsEconomic life of the equipment13 yearsAnnual lease payment, in arrears (commencing 30 June 20X6)$2,500Fair value of the equipment at 1 July 20X5$19,517Residual value at end of lease (not guaranteed)$2,000Residual value at end of economic lifenilInterest rate implicit in lease6%PV factor of $1 at end of one year0.9434PV factor for annuity of $1 per year for 10 years (6%)7.3601PV factor of annuity of $1 per year for 13 years (6%)8.8527PV factor of $1 at end of 10 years (6%)0.5584The lease is non-cancellable, and at the end of the lease the equipment will be returned to Bow (lessor). The lease has been classified as a finance lease by Bow.What is the reported amount of the current liability (rounded to the nearest whole dollar) in the balance sheet of the lessee at the end of 30 June 20X7 in accordance with the requirements of AASB 16 Leases?

According to AASB 16 Leases a right-of-use asset is required to be. A depreciated over the lease term, where the cost of the right-of-use lease asset reflects that the lesseewill exercise the purchase option at end of the lease termo B depreciated over the underlying asset's useful life, where the cost of the lease asset reflects that thelessee will exercise the purchase option at end of the lease termo C depreciated over the longer of the lease term and its useful life of the right-of-use lease asset, wherethe lessee will not obtain ownership at the end of the lease termo D depreciated from lease commencement to the longer of the lease term and its useful life, only wherethe economic benefits to be realised from using the asset are for a period of greater than ten years

Which of the following statements is not correct in accordance with the requirements of AASB 16 Leases? Group of answer choices The commencement of the lease is the date from which the lessee is entitled to exercise its right to use the underlying asset. After initial recognition, right-of-use assets are depreciated. The lease liability recognised at the commencement of the lease term represents the present value of future lease payments. A right-of-use asset is required to be depreciated over the lease term, where the cost of the right-of-use lease asset reflects that the lessee will exercise the purchase option at end of the lease term.

On 1 July 2021, Pretty Ltd leases a machine with a fair value of $109 444 to Cool Ltd for 5 years for an annual lease payment (payable in advance) of $25 000, and Cool Ltd guarantees in full the estimated residual value of $15 000 on return of the asset. Petty Ltd does not incur any initial direct costs in preparing the lease agreement. What would be the interest rate implicit in the lease? Group of answer choices 9% 14% 12% 10%