Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

ACCTG 211 financial accounting

Semester 2 2023

Reference: Assignment 3

Note:

(a) You must use the Assignment 3 Answer Booklet provided on Canvas to submit your answers online.

Do not change the format of the answer booklet when submitting it online. At times, more space has been provided than is necessary to answer a question.

(b) It is your responsibility to ensure this assignment is successfully submitted as a pdf before 6 pm on Friday, 08 September 2023.

What does ‘successfully submitted’ mean?

It means your completed Assignment 3 Answer Booklet * was accepted by Canvas** and the said Assignment 3 Answer Booklet is downloadable and readable by the ACCTG 211 markers.

*You must submit the correct document for each assignment.

**Ultimately, there must be an acceptance cut-off policy. Late submissions, as determined by Canvas (Speedgrader), will not be accepted for grading. It may take Canvas a few minutes to process your submission. So? Submit your assignment well before 6 pm.

(c) This assignment counts for 4% of the final grade for the course.

(d) Do you have questions about the material covered in this assignment?

Go to Canvas/Modules

QUESTION 1

You are an intern for a firm of chartered accountants who prepares the financial statements for Lessee Ltd and Lessor Ltd.  Both entities provided their lease details, and you summarised the lease details in the table below.

Required for Part A Lessee Ltd:

(a) Prepare the recognition and initial measurement journal entry as at 1 April 2023 and the payments table.

(b) Prepare the journal entry for the subsequent measurement of the lease liability as at 31 March 2025.

(c) Prepared the journal entry as at 31 March 2025, for the subsequent measurement of the ROU asset.

(d) Prepare the journal entry as at 31 March 2028 to record the final payment made by Lessee Ltd.

(e) Briefly explain why Lessee Ltd could not use either of the two recognition exceptions.

(f) Prepare financial statements following the requirements of NZ IFRS 16 Leases over the lease period to enable Lessee Ltd to appreciate the effects of the lease on the entity. Lessee Ltd classifies interest expense as a cash flow from operating activities.

Required for Part B Lessor Ltd:

Classified as a Finance lease:

(a) Prepare the journal entry to recognise the finance lease and the receipts table.

(b) Prepare the journal entry to subsequently measure the finance lease on 31 March 2028.

Question 1 Part B Lessor continued:

(c) Prepare the final journal entry for Lessor Ltd at the end of the lease.

(d) Post all the relevant journal entries that would have been prepared over the five years of the finance lease to the Finance Lease Receivable (FLR) GL account. Balance this asset account at the end of each financial year.

(e) Prepare financial statements following the requirements of NZ IFRS 16 Leases for the five  financial years of the lease. Lessor Ltd classifies interest income as a cash flow from financing activities.

If classified as an Operating lease:

(a) Prepare the journal entries for the five years of the lease to recognise the operating lease income and depreciation expense. Note: Ignore the RVG and the UGRV.

(b) Prepare financial statements following the requirements of NZ IFRS 16 Leases for the five financial years of the lease.

QUESTION 2

The 2022 Financial Results/Report for Air NZ and Auckland Airport are provided on Canvas/Modules/Assignments 1 to 5. Answer the questions in the answer booklet for Air NZ.  All questions relate to 2022.

QUESTION 3

XYZ Ltd purchased machinery on 1 April 2017 for $500 000; the machinery had an estimated useful life of ten years.

On 1 October 2020, it was determined that the machinery had a FV of $360 000, a FV less costs to sell of $348 000, and a VIU of  $350 000.

On 1 February 2023, it was determined that the machinery had a FV of $180 000, a FV less costs to sell of $175 000,  and a VIU of 200 000.

Required:

Part A:

Assume XYZ Ltd used the cost model. Complete the financial statements for XYZ Ltd for the financial years ended 31 March 2018, 2021, 2022, 2023, and 2024.  Show your workings.

Part B:

Assume XYZ changed to the revaluation model on 1 October 2020. Complete the financial statements for XYZ Ltd for the financial years ended 31 March 2018, 2021, 2022, 2023, and 2024. Show your workings.