Alpine Ltd Signed a 10-Year Non-Cancellable Lease with Mt Buller

question 14

Multiple Choice

Alpine Ltd signed a 10-year non-cancellable lease with Mt Buller Ltd for the use of high-tech equipment.No bargain purchase option is provided in the lease contract.The following information is available: $$\begin{array} { | l | r | } \hline \text { Fair value of equipment } & \$ 200000 \\\hline \text { Economic life of the equipment } & 12 \text { years } \\\hline \text { Minimum lease payments } & \$ 120000 \\\hline \text { Executory costs } & \$ 5,000 \\\hline\end{array}$$ What is the amount to be recorded as an asset and a liability in the books of the lessee that is in accordance with IAS 17 Leases?

• A)$0
• B)$120 000
• C)$125 000
• D)$200 000

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Definitions:

Pizza Toppings

Various ingredients added on top of the pizza crust and sauce before baking, such as vegetables, meats, and cheese.

Program Year

A specific period used for administrative, financial, or operational planning and assessment, often aligning with a fiscal or academic calendar.

Ace of Spades

A playing card with a single spade symbol and an 'A' rank, traditionally considered to be the highest card in the deck in many card games.

Ace of Hearts

Typically refers to a playing card in the suit of hearts that features a single pip in the center, often associated with love and happiness in symbolism.