National Finance Company, signed a lease agreement with a leading logistic company of Oman on January...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
National Finance Company, signed a lease agreement with a leading logistic company of Oman on January 2019. The leasing company will provide transport vehicles on lease to the lessee according to following conditions: a) The term of lease is 5 years. The Lease agreement is non-cancelable and requiring equal rental payment of 1,000,000 OMR at the beginning of each year (Annuity due basis) b) The transport vehicles have a fair value at the time of Lease Agreement around OMR 40 million and an economic life of 5 years and no residual value. e) The lessee pays all the executory costs directly to the third party except for the property tax of OMR 3000 per year which is included as a part of its annual payment to National Finance Company. d) Lessee's incremental borrowing rate is 12% per year. e) Lessee depreciates similar transport vehicles that it owns at a straight ling method depreciation. The targeted rate of return expected by the lessor is 10%. The fact is known to the lessee. Required 1) Identify the type of lease both the companies have entered. 2) Write journal entry for the type of lease. 3) Prepare first lease payment schedule. Obtain the published financial statements of a public quoted company in Oman for the last three (03) years. Study the overall financial performance of that company over that period. In addition, compare the performance of this organization with that of its competitor as well the general industry standards of performance (if available). Evaluate the performance of the organization chosen not only from a financial perspective, but also from other non- financial perspective' as well. Based on your analysis and findings, prepare a report of your findings. Your report should start with a brief introduction about the company and the relevant industry. The body of your report should essentially be a more detailed analysis of relevant ratios with a commentary of your findings. The word count should be 2000 to 2500 words. Strictly not permitted to exceed more than 2500- word limit This is an individual assignment. Marking scheme: Introduction 1 mark A very brief introduction about the company and the relevant industry 4 marks Financial analysis of the company's performance (3 years) 5 marks Non-financial analysis of the company chosen Industry / competitor analysis in terms of financial performance Commentary of your findings, red flags Conclusion Conclusion 3 marks 3 marks 3 marks Imark TOTAL-20 marks National Finance Company, signed a lease agreement with a leading logistic company of Oman on January 2019. The leasing company will provide transport vehicles on lease to the lessee according to following conditions: a) The term of lease is 5 years. The Lease agreement is non-cancelable and requiring equal rental payment of 1,000,000 OMR at the beginning of each year (Annuity due basis) b) The transport vehicles have a fair value at the time of Lease Agreement around OMR 40 million and an economic life of 5 years and no residual value. e) The lessee pays all the executory costs directly to the third party except for the property tax of OMR 3000 per year which is included as a part of its annual payment to National Finance Company. d) Lessee's incremental borrowing rate is 12% per year. e) Lessee depreciates similar transport vehicles that it owns at a straight ling method depreciation. The targeted rate of return expected by the lessor is 10%. The fact is known to the lessee. Required 1) Identify the type of lease both the companies have entered. 2) Write journal entry for the type of lease. 3) Prepare first lease payment schedule. Obtain the published financial statements of a public quoted company in Oman for the last three (03) years. Study the overall financial performance of that company over that period. In addition, compare the performance of this organization with that of its competitor as well the general industry standards of performance (if available). Evaluate the performance of the organization chosen not only from a financial perspective, but also from other non- financial perspective' as well. Based on your analysis and findings, prepare a report of your findings. Your report should start with a brief introduction about the company and the relevant industry. The body of your report should essentially be a more detailed analysis of relevant ratios with a commentary of your findings. The word count should be 2000 to 2500 words. Strictly not permitted to exceed more than 2500- word limit This is an individual assignment. Marking scheme: Introduction 1 mark A very brief introduction about the company and the relevant industry 4 marks Financial analysis of the company's performance (3 years) 5 marks Non-financial analysis of the company chosen Industry / competitor analysis in terms of financial performance Commentary of your findings, red flags Conclusion Conclusion 3 marks 3 marks 3 marks Imark TOTAL-20 marks
Expert Answer:
Answer rating: 100% (QA)
Answers Summarized the information provided in the question National Fin... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. The lease qualifies as a capital lease. Pearson's incremental...
-
The City of Clear Lake signed a lease agreement with Mountainside Builders whereby Mountainside will construct a new office building for city administrative use and lease it to the City for 30 years....
-
Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2010. Annual rental payments of $40,000 are to be made at the beginning of each lease year...
-
Which of the following statements is correct regarding a work sheet and the adjustment process? Adjusting journal entries are prepared from the Adjusted Trial Balance columns. Adjusting journal...
-
Explain credit-, market-, and liquidity risks.
-
Students might wish to know that Amazon actually put a group attendance bonus in place in its German fulfillment centres (known elsewhere as warehouses!). Trade union officials viewed the practice as...
-
Referring to Exercise 12.6, use the \(U\) statistic at the 0.05 level of significance to test whether weight loss using lubricant A tends to be less than the loss using lubricant \(\mathrm{B}\). Data...
-
The Environmental Protection Agency sometimes imposes penalties on firms that pollute the environment. But did you know that there is a legal market for pollution? A mechanism that has been developed...
-
Use the Chain Rule to find the indicated partial derivatives. z=3x-5y; x = u46v, y = (2u - v); dz dz au av 20 220 = = 12u3-56 (2u-v)3 -24(v-2u)3-48v2 eBook Submit Answer x
-
Refer to Exercise 29 of Section 4.2. For what values of h will a sensitivity analysis on the effect of a change of h pounds of peat be valid? In exercise A lawn and garden store creates three...
-
Your client desires an interior temperature of 78F for thedesign of her HVAC system in Kansas City, Missouri (close to theairport weather station). Assuming that a 5% design will besatisfactory, what...
-
If a loan of $1750 is payed off with monthly payments of $200 with an annual interest rate of 12%, then how many payments - including a final partial payment - are needed to pay off the loan?
-
QUESTION 4 REQUIRED Use the information provided below to answer the following questions. Answers to the ratios must be expressed to two decimal places. 4.1 What percentage of the sales is made up of...
-
1. Define Marginal Benefits. 2. What is an inferior good? 3. Define price elasticity in health care. 4. Define a supply curve in health care. 5. Define asymmetric information in health care.
-
(i) Design a 1-bit ALU for ADD, SUB, OR, & AND functions. (2 marks) (ii) Cascade 8-bits ALU to implement a MIPS ALU with overflow. (5 marks) Q4: (i) Complete the Truth Table for the ADD with Carry,...
-
Comfy Home employs part-time staff in its stores to help them with customers. Staff are paid an hourly wage and do not receive benefits. Between March 1st and 20th, the staff worked 400 hours at $15...
-
How do recombinant DNA techniques contribute to the production of biopharmaceuticals, vaccines, and industrial enzymes through microbial fermentation, mammalian cell culture, and transgenic organism...
-
A stock has had returns of 8 percent, 26 percent, 14 percent, 17 percent, 31 percent, and 1 percent over the last six years. What are the arithmetic and geometric average returns for the stock?
-
Presented below is information from the annual report of Potter Plastics, Inc. (a) Compute the return on common stock equity and the rate of interest paid on bonds. (Assume balances for debt and...
-
During 2010, Simms Company redeemed $2,000,000 of bonds payable for $1,880,000 cash. Indicate how this transaction would be reported on a statement of cash flows, if at all.
-
Dan Webster will invest $10,000 today in a fund that earns 5% annual interest. How many years will it take for the fund to grow to $13,400?
-
solve the given problem using PSO method \[f(X)=1200\left(2 x_{1} x_{3}+2 x_{2} x_{3} ight)+2500 x_{1} x_{2}+500\left(\frac{1000}{x_{1} x_{2} x_{3}} ight)+100\left(\frac{1000}{10 x_{1} x_{2} x_{3}}...
-
Solve the optimization problem using SA \[\min f(X)=100\left(x_{1}^{2}+x_{2} ight)^{2}+\left(1-x_{1} ight)^{2}\] subject to $X \in[0,7]$
-
Discuss the perturbation mechanism of simulated annealing.
Study smarter with the SolutionInn App