2215_sem1_0910_midsem2_test[1] - UNIVERSITY OF MALAYA...

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UNIVERSITY OF MALAYA MID-SEMESTER TEST FOR THE DEGREE OF BACHELOR OF ACCOUNTING ACADEMIC SESSION 2009/2010: SEMESTER 1 CAEA2215/2201: FINANCIAL ACCOUNTING AND REPORTING III 11 SEPTEMBER 2009 TIME: 1 Hour 15 minutes INSTRUCTIONS TO CANDIDATES 1. Answer ALL questions. 2. Answer the multiple choice questions in the OCR form by darkening the appropriate answer with 2B or HB pencil. 3. Answer the subjective questions in the answer booklet. 4. Return the question paper, OCR form and the answer booklet. Allocation of marks: Question Marks MCQ 20 Problem solving 23 Essay 7 Total 50 NAME: MATRIC NO: TUTORIAL GROUP (TIME): 1
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Question 1 i) Wawasan Construction Bhd. leases one equipment on 1 January 2008 with Efiqa Leasing Bhd. The equipment is new at the inception of the lease term and it costs the lessor RM250,000. The estimated useful life of the equipment is six years while the lease term is four years starting 1 January 2008. The purchase option price of the equipment is RM50,000 and it is exercisable on 2 January 2011. The fair value of the leased asset on 1 January 2008 is RM300,000 and there will be four annual lease payments each on 1 January beginning 1 January 2008. On 1 January 2008, residual value of the asset is estimated to be RM60,000 and nil at the end of its useful life. Wawasan Construction Bhd. and the party related to the lessor do not guarantee the residual value. For the lease agreement, the implicit interest rate is 10% per annum while the incremental borrowing rate is 9%. A straight-line depreciation method is used for the leased assets. A gross basis method is used in recording the transactions if the lease is a finance lease. The accounting year for both companies ends on 31 December every year. ( Note : determine the right present value discount factor to be used in this question from the followings:) PVAD 10%, 4 = 3.4868 PVAD 10%, 5 = 4.1699 PV of 1 10%, 3 = 0.7513 PVA 10%, 4 = 3.1699 PVA 10%, 5 = 3.7908 PV of 1 9%, 3 = 0.7722 PVAD 9%, 4 = 3.5313 PVAD 9%, 5 = 4.2397 PV of 1 10%, 5 = 0.6209 PVA 9%, 4 = 3.2397 PVA 9%, 5 = 3.8896 PV of 1 9%, 5 = 0.6493 Required: a) For Wawasan Construction Bhd.: 1)
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This note was uploaded on 11/10/2010 for the course UM ceaa1122 taught by Professor Sam during the Spring '10 term at Assumption College.

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2215_sem1_0910_midsem2_test[1] - UNIVERSITY OF MALAYA...

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