Exam (elaborations) Accounting (ACC3001)

Fin Acc III 2021




Part 1: Question Part (a)
With respect to the sale and leaseback transaction in FS:
Prepare all journal entries to account for the Sale and leaseback transaction in FS for the year ended 31 December 2021.
No journal entries relating to current tax are required.
Narrations are not required.


Present value of lease payments:
12 P/Yr
A N = 60
A FV = 50 000
A Pmt = 25 000
A I/YR = 10.25%
Therefore PV = R1 200 000 1200000
Dr Cr

dr Bank 1 400 000
cr Manufacturing Eqiupment 1 125 000
A cr Gain on Sale of Equipmment 275 000 Acc and Amount

A dr ROU Asset (R1 125000 x R1 200 000 / R1 400 000) 964 286 Amt
A cr lease Liability 1 200 000 Amt
CQ dr Gain on Sale 235 714 Amt
A accounts
dr Deferred tax expense (DT calc) - ONLY IF MOVEMENT AND
CQ MAKES SENSE 150 000 Acc
A cr Deferred tax asset 150 000 Amt

A dr Depreciation 64 286 Acc
CQ cr Accumulated Depreciation 64 286 Amt

A dr Lease Liability 150 000 Acc
A cr Bank 150 000 Amt

A dr Interest Expense 59 560 Acc
CQ cr Lease Liability (Amortise P1:P6) 59 560 Amt

A dr Deferred tax expense 7 323 Acc
CQ cr Deferred tax asset 7 323 Amt movement




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, Auditing IV Test batch Test 1 2020



Tax calculation
31 12 2020 CA TB TD DT
A Manufacturing Equipment 1 200 000 900 000 300 000 84 000 Liability
01 07 2021
Right of use asset 964 286 Movement
Lease Liability 1 200 000 150 000
31 12 2021 235 714 - 235 714 66 000 Asset
CQ Right of use asset 900 000 Movement
C! Lease Liability 1 109 560 7 323
209 560 - 209 560 58 677

Total




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