Exam (elaborations)
FAC3703 Assignment 1 Semester 2 2024 - DUE 7 September 2024
- Course
- Institution
QUESTIONS WITH ANSWERS FAC3703 Assignment 1 Semester 2 2024 - DUE 7 September 2024
[Show more]
Seller
Follow
mulah11
Reviews received
Content preview
[Company name]FAC3703 Assignment
1 Semester 2 2024 -
DUE 7 September
2024
QUESTIONS WITH ANSWERS
, FAC3703 Assignment 1 Semester 2 2024 - DUE 7 September 2024
Ozone Ltd Ozone Ltd is neither a manufacturer nor a dealer that leases ozone friendly
machinery that reduces the emission of harmful chemicals. Ozone has a 28/29
February year-end. As part of its business strategies, Ozone Ltd entered into the
following transactions: Transaction 1 Ozone Ltd entered into an agreement with
Woodworks Ltd in which Ozone Ltd leased machinery to Woodworks Ltd. The contract
between the two companies contains a lease in terms of IFRS 16, Leases. Ozone Ltd
purchased this machine on 1 March 2023 at a cost of R420 000. FAC3703/02/2024 The
lease agreement for the machine is as follows: Fair value of the machine on 1 March
2023 R420 000 Lease commencement date 1 March 2023 Lease instalments payable
bi-annually in arrears on 31 July and 28 February R90 000 Guaranteed residual value at
the end of the lease term R15 000 Unguaranteed residual value at end of the lease term
R5 000 Lease term 3 years Initial direct costs incurred by Ozone Ltd R10 000 Initial
direct costs (Legal Fees) incurred by Woodworks Ltd R15 000 Woodworks Ltd will take
ownership of the machinery at the end of the lease term upon payment of the
guaranteed residual value. The machinery has a useful life of 5 years at the beginning
of the lease term and a Rnil residual value. The profit before tax of Woodworks Ltd for
the year ended 29 February 2024 amounted to R1 500 000 before the lease transaction
was taken into account. Assume the deferred tax balance at 1 March 2023 was Rnil.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mulah11. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.85. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
71184 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now