Professional Documents
Culture Documents
Hugo Boss leases sewing equipment from Armani Leasing Company under
the following lease term.
- The lease term is 10 years, non cancelable, and requires equal rental
payments of $22,250 due at the beginning of each year starting January 1,
2007
- The equipment has fair value and cost at inception of the lease (January 1,
2007 ) of $185,078 and estimated economic life of 10 years,a nd residual
value (which is guaranteed
- Hugo Boss incremental borrowinnng rate is 9% per year. The implicit rate
is also 9%.
- The sewing equipment are specific, and Hugo Boss could use it without
material modification
Required :
1. Evaluate the criteria fo the classification of the lease and determine how
the lesse and lessor should account for the lesse transaction refers to
PSAK 30
(revision).(5%)
2. Would the classification be different for the lesse and lessor if we use the
criteria based on FASB No. 13?(4%)
3. Based on your answer in question 1, prepare the journal entries for the
lesse and lessor at January 1, 2007 and December 31,2007. Insert the
lesse amortization schedule for the lessor for two years.(10%)
4. What would have been the amount capitalizes by lesse upon the inception
of the lease if :
a. The residual value of $20,000 had been guaranteed by a third party,
not the lsse ?
5. On the lessor, what would be the amount recorded as the net investment
(lease receivable) at the inception of the lease, assuming :
Problem 2 (25%)
b. Describe the major difference and the major similarity beteen the
accumulated benefit obligation and projected benefit obligation.
c. 1. Explain why pension gains and losses are not recognized on the income
statement in the period in which they arise. 2. Briefly describe how
pension gains and losses recognized
Problem 3(25 %)
The following are financial information of PT. Terbuka Jaya for the year
ended Decemebr 31, 2007
PT TERBUKA JAYA
INCOME STATEMNET
COGS (3,740,000)
Operating Expenses
Other Revenues/Expenses
PT TERBUKA JAYA
2007 2006
PT TERBUKA JAYA
2007 2006
Required
1. Prepare a statement of cash flows for PT.Terbuka Jaya using the direct
method in calculating cash flow from operation. Assume that the short
term investments are avaible-for-sale securities.
Problem 4
On January 1, 2003 ABC Company purchased a building and machinery that have
the following useful lives, savages value , and costs
-. Bulidings, 25 years estimated useful life, $ 4,000,000 cost, $ 400,00 salvage,
value
The building has been depreciated under the straight line method through 2007.
In 2208. The company decided to switch to the double-declining balance
methods of depreciation for the to change the total useful life of the machinery
to 8 years, with a salvage value of $ 25,000, at the end of time. The machinery is
depreciated the straight line method.
Instructions
c. * If ABC Co. debited and expense account and credited cash on the date of
acquisition of machine, an these error was nown on December 31, 2005
after closing, what would the journal entry needed to correct this error ?
Will your answer be different if the error was found before closing ?
d. Compute the affect of the changed retained earnings balance from the
completed-contarct method to the percentage of-completion method to
retained earnings statements at the beginning of 2008. ( Assume the
income tax rate is 40 % for all years. )
Problem V ( 15 % )
PT ABC is established in the beginning of the year 2007 and the currently is
preparing its financial reports as Decemebr 31, 2007. PT ABC needs tour
assistance to calculate the tax expense, tax payable and deferred tax expense
that should be reported. Information available for you is as follow
- Some leased assets are capitalized and depreciated along their economic
life. Total depreciation expense for leased asstes in 2007 is Rp. 100
Million. Lease payments during the year, which is recognized as lease
expense for tax purposes is Rp 150 million.
- Tax Rate is 30 %
Required :