Question 1:
Refer to Cochlear Ltd’s Annual Report 2020:
https://www.cochlear.com/au/en/corporate/investors/annual-reports
Identify the carrying amount of each class of Cochlear Ltd’s Intangible assets at 30 June 2020. Discuss their relevance to Cochlear Ltd’s business.
Question 2:
Describe the accounting policies relating to Intangible Assets adopted by Cochlear Ltd.
Word Limit
700 words
Question: 3
On 1 July 2019, Coltrane Ltd entered into a lease contract, to lease sound equipment from Blue Note Ltd for six years.
The lease contract requires Coltrane Ltd to make half yearly lease payments of $230,000 for 6 years, on 30 June and 31 December, each year, commencing on 31 December 2019. Included within the $230 000 half yearly lease payments, is an amount of $20,000 representing payment to Blue Note Ltd for the insurance and maintenance of the equipment. The lease contract includes a bargain purchase option, which Coltrane Ltd expects to exercise, to purchase the equipment for $441,500 at the end of the lease term. The interest rate implicit in the lease contract is 6% per annum, (3% per half year).
Blue Note Ltd manufactured the sound equipment leased to Coltrane Ltd, at a cost of $2,000,000. The fair value of the equipment at the inception of the lease was $2,400,000. The equipment is expected to have a useful life of 8 years, after which time it is expected to have a salvage value of $150,000. The equipment is to be depreciated on a straight-line basis.
The table below sets out data on present values:
Number of periods to Maturity
|
Interest Rate
|
Present Value of $1 due at Maturity
|
Present Value of an annuity of $1 until Maturity
|
6
|
3%
|
0.837484
|
5.417191
|
12
|
3%
|
0.701380
|
9.954004
|
6
|
6%
|
0.704961
|
4.917324
|
12
|
6%
|
0.496969
|
8.383844
|
Required:
a) Prepare the journal entries relating to the lease contract for Coltrane Ltd for the financial year ended
30 June 2020, in accordance with AASB 16:
Leases. Show all workings necessary to derive your answer.
Prepare the journal entries relating to the lease contract for Blue Note Ltd for the financial year ended
30 June 2020, in accordance with AASB 16:
Leases. Show all workings necessary to derive your answer