Business Growth Expectation Business Finance

Question: Describe about the Business Growth Expectation for Business Finance. Answer: 1: The belief is completely baseless. The vital organizational information should not be shared with any other organization as it might jeopardize the growth expectation. This credible information is shared with other organization the risk of competition will increase significantly. The risk will increase in significant magnitude. The risk of business will increase. The operational benefit will be limited. The competitor firm may use that credible information for their own benefit which will reduce the financials of the company (McNairy Cross, 2016). 2: Depreciation Total Cost of the Aircraft 12000000 Airframe comprised 55% of the cost 6600000 Engines were 40% of the cost 4800000 Fittings comprising 5% of the cost 600000 Depreciation of Airframe Airframe cost 6600000 Less: Scarp Value 150000 6450000 The life of the Airframe years 15 Depreciation on Straight Line 430000 Depreciation of Engine Engines cost 4800000 Depreciation for 2920 hours 700800 Depreciation of Fittings Fittings cost 600000 Useful Life 5 years 120000 Journal Dr Cr 1.07.2013 Aircraft 12000000 To Bank 12000000 30.06.2014 Depreciation on Airframe 430000 Depreciation on Engines 700800 Depreciation on Fittings 120000 To Accumulated Depreciation 1250800 30.06.2014 Accumulated Depreciation 1250800 To Aircraft 1250800 3: (a) Lease Payment (350000-35000) 315000 Total Payment of lease rent for 5 years 1575000 Machinery fair value 1294384 Interest 280616 Fair Value of machine 1294384 Years of Lease 5 Monthly Payment -315000 Interest Rate 6.92% RATE(nper,pmt,pv,fv,type,guess) Or IRR method can be used to calculate implicit interest rate Year Receipt Payment Net Payment 0 1294384 1 0 -315000 -315000 2 0 -315000 -315000 3 0 -315000 -315000 4 0 -315000 -315000 5 0 -315000 -315000 1294384 -1575000 -280616 Year 0 1294384 1 -315000 2 -315000 3 -315000 4 -315000 5 -315000 IRR 6.92% PV $1,294,384.00 $294,616.81 Present Value of Lease payment (PV Function) (PV of Single Premium) (b) Journal Entry In the books of Burt Ltd Dr Cr 01.07.2015 Machinery 1294384 To Lease Obligation 1294384 30.06.2016 Lease rentals expense 294617 Interest Expenses 20383 Insurance and maintenance 35000 To Bank 350000 (c ) In the books of Burt Ltd Balance Sheet Non Current Liabilities Lease Liability 999767 (1294384-294617) Current Liabilities Interest Payable 20383 Lease Liability 294617 Fixed Asset Lease Machinery 1294384 (d) Journal Entry In the books of Burt Ltd Dr Cr 30.06.2016 Lease rentals expense 294617 Interest Expenses 20383 Insurance and maintenance 35000 To Bank 350000 30.06.2017 Lease rentals expense 294617 Interest Expenses 20383 Insurance and maintenance 35000 To Bank 350000 4: The intangible assets are non monetary assets and without active physical substance and identifiable. There are relevant recognition criteria for the intangible assets. The assets will be valued at the cost or on the basis of revaluation model. The cost of acquisition of intangible assets is to be amortized on the basis of its use. The merger acquisition has a major role to play in terms of buying and selling of intangible assets. The assets can be bought separately. The exploration and the evolution of the asset is also an important part of the business process (Iasplus, 2016). The merger and acquisition will include purchase of the company or of the brand of the company. Once the brand is being purchase by another company it adds value to the new company. Adidas, Nike has significant brand value; if Nike acquires Adidas then the brand value of Nike will be increased because of its purchase of Adidas. References: Iasplus, 2016. IAS 38 Intangible Assets. [Online] www.iasplus.com Available at: https://www.iasplus.com/en/standards/ias/ias38 [Accessed 12 October 2016]. McNairy, J.D. Cross, M., 2016. About That Trade Secret Leak: Its From Inside The Business! [Online] www.calpeculiarities.com Available at: https://www.calpeculiarities.com/2016/08/03/about-that-trade-secret-leak-its-from-inside-the-business/ [Accessed 12 October 2016].