PRE DAC 318 CAT 2 APR 2022 FINAL.| X + X -> @ File | C:/Users/talal/Downloads/DAC%20318%20CAT%202%20APR%202022%20FINAL.pdf . . . of 2 Q + | Page view | A Read aloud | () Add text | Draw Highlight Erase a) What is a finance lease as defined by IAS 17? Give four situations (criteria) that would normally lead to a lease being classified as a finance lease. (7 marks) b) Yana Ltd enters into a six-year capital lease with Supertronics Lid for a sporting equipment. The annual lease payment is shs 12,979, and the interest rate is 8%. i) Show the journal entry to record the capital lease at its inception. (4 marks) ii) Show the necessary journal entries at the end of year 1. (4 marks) Question 2 ABC Ltd signs a five-year capital lease with XYZ Ltd for office equipment. The annual lease payment is shs 20,000, and the interest rate is 8%. Required i) Journal entry to record ABC Lid's capital lease at its inception. (3 marks) ii) Journal entries at the end of year 1 to record annual lease payment. (3 marks) iii) Complete a lease payment schedule for the five years of the lease with the following headings: (9 marks) Period Beg Bal of Reduction of Cash Ending Bal Ending Lease Interest on Lease Lease of Lease Date Liability Lease Liability Liability Payment Liability Question 3 Mariandasi Ltd reported shs 520,000 of net income for 2005 and declares shs 60,000 of cash dividends on its preferred stock for 2005. At the beginning of 2005, the company had 100,000 outstanding shares of common stock. The following events took place during the year 2005: i) June 1, completed a 2-for-1 bonus issue ii) Oct 1, issued 50,000 common shares for cash at the market price of shs 5 per share. Required a) The weighted-average number of common shares outstanding for 2005. (8 marks) b) The company's basic EPS for 2005. (7 marks) Type here to search 14:35 ? 29C Light rain ~0 28/04/2022