Depreciation and Correct Answer essay

The amount of depreciation charged in the first year $42 000 $40 250 Question 5 If a sale and leaseback transaction results in a finance lease, AS 17 Leases, revised the following accounting treatment for any excess of sales proceeds over the carrying amount: immediately recognize as income by the seller-lessee defer and amortize over the lease term Question 6 O out Of 1 points Which of the following statements is incorrect?

Depreciation and interest expenses on finance leases may exceed rental payments and result in lower profits being reported in the early years of the lease Correct Answer: Recognition of the present value of future lease payments as a liability increases reported current and non-current liabilities.

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This favorably affects debt-equity ratios and liquidity- solvency ratios Question 7 With respect to operating leases, lessons are NOT required under AS 17 Leases, to disclose: future minimum lease payments under non-concealable operating leases in aggregate Correct Answer: future minimum lease payments under concealable operating leases, separately Question 8 The following information relates to Goodbye Limited for the year ended 30 June 2014.

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