Question 1

Based on the following information, what is the net book value of the asset on the December 31, 2012 balance sheet?

Accepted Answer

A) $185,000 
B) $200,000 
C) $300,000 
D) $350,000 
A) $185,000 
B) $200,000 
C) $300,000 
D) $350,000 C

Question 2

What is "agricultural activity"?

Accepted Answer

A) The harvested product of biological assets. 
B) A living animal or plant. 
C) The transformation of biological assets. 
D) Planting, harvesting and marketing produce. 
A) The harvested product of biological assets. 
B) A living animal or plant. 
C) The transformation of biological assets. 
D) Planting, harvesting and marketing produce. C

Question 3

Which of the following is correct with respect to the accounting for "investment properties"?

Accepted Answer

A) Under ASPE, either the cost or fair value model may be used. 
B) Under IFRS, either the cost or fair value model may be used. 
C) Under ASPE, either the revaluation or fair value model may be used. 
D) Under IFRS, either the revaluation or fair value model may be used. 
A) Under ASPE, either the cost or fair value model may be used. 
B) Under IFRS, either the cost or fair value model may be used. 
C) Under ASPE, either the revaluation or fair value model may be used. 
D) Under IFRS, either the revaluation or fair value model may be used. B

Question 4

Explain when a non-current asset is impaired.

Accepted Answer

•An asset (or cash generating

Question 5

Explain how non-current assets that are part of a discontinued operation should be accounted for.

Accepted Answer

•Enterprises that have disposed of, or p

Question 6

Bean World Company produces two distinct product lines: dried beans and canned beans. Due to changing consumer tastes, the company is evaluating these two cash generating units for impairment for the year ending December 31, 2010. Relevant information is as follows:
   Required:
Determine whether either product line is impaired, and if so, the amount of the impairment.

Accepted Answer

Dried beans @#IMG-DLM&_TB2820_00 Since fair value

Question 7

How is an impairment loss allocated to the non-current asset(s)?

Accepted Answer

A) Allocate the impairment loss in proportion to the gross amounts of the assets in the cash generating unit. 
B) Allocate the impairment loss to assets with the highest carrying amounts in the cash generating unit. 
C) Allocate the impairment loss in proportion to the net carrying amounts of the assets in the cash generating unit. 
D) Allocate the impairment loss to assets with the lowest carrying amounts in the cash generating unit. 
A) Allocate the impairment loss in proportion to the gross amounts of the assets in the cash generating unit. 
B) Allocate the impairment loss to assets with the highest carrying amounts in the cash generating unit. 
C) Allocate the impairment loss in proportion to the net carrying amounts of the assets in the cash generating unit. 
D) Allocate the impairment loss to assets with the lowest carrying amounts in the cash generating unit.

Question 8

Wilson Inc wishes to use the revaluation model for this property:   The fair value for the property is $140,000. Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years, how much depreciation expense would be recorded in the year subsequent to the revaluation?

Accepted Answer

A) $16,000 debit 
B) $16,000 credit 
C) $28,000 credit 
D) $28,000 debit 
A) $16,000 debit 
B) $16,000 credit 
C) $28,000 credit 
D) $28,000 debit

Question 9

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

Accepted Answer

A) At time of initial recognition upon acquisition. 
B) If the entity cannot obtain fair value information. 
C) At time of subsequent measurement on each balance sheet. 
D) If the entity can obtain fair value information. 
A) At time of initial recognition upon acquisition. 
B) If the entity cannot obtain fair value information. 
C) At time of subsequent measurement on each balance sheet. 
D) If the entity can obtain fair value information.

Question 10

Reid Resch is a maker of instruments for measuring weight, temperature, pressure, and so on. Due to the increasing use of digital instruments, one of the company production lines based on analogue technology is potentially impaired. Management has produced the following information relating to this production line, which is considered to be a cash generating unit:
   Required:
Determine whether the production line is impaired, and if so, the amount of the impairment.

Accepted Answer

@#IMG-DLM&_TB2820_00 Since fair value le

Question 11

Company Nine purchased land for $600,000 some years ago. Fair value was $800,000 at the beginning of this year and $350,000 at the end of this year.
Prepare the journal entry to record this year's revaluation adjustment.

Accepted Answer

@#IMG-DLM&_TB2820_00 * Loss of $200,000

Question 12

Wilson Inc wishes to use the revaluation model for this property:   The fair value for the property is $140,000. Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years, how much would be booked to accumulated depreciation in the year subsequent to the revaluation?

Accepted Answer

A) $16,000 debit 
B) $16,000 credit 
C) $28,000 credit 
D) $28,000 debit 
A) $16,000 debit 
B) $16,000 credit 
C) $28,000 credit 
D) $28,000 debit

Question 13

Which statement describes the "historical cost model"?

Accepted Answer

A) A model which keeps the carrying value of an asset and adjusts for depreciation and impairment. 
B) A model which restates the value of an asset at each measurement date. 
C) A model which restates the carrying value of an asset to the asset's fair value on the date of revaluation. 
D) A model which values the asset based on its productive capacity. 
A) A model which keeps the carrying value of an asset and adjusts for depreciation and impairment. 
B) A model which restates the value of an asset at each measurement date. 
C) A model which restates the carrying value of an asset to the asset's fair value on the date of revaluation. 
D) A model which values the asset based on its productive capacity.

Question 14

Explain the meaning of biological assets and agricultural produce. Classify each of the following items as: biological asset, agricultural produce, or neither.

Accepted Answer

Biological assets are living p

Question 15

Which statement is correct?

Accepted Answer

A) The revaluation model is required for non-current assets under IFRS. 
B) The revaluation model is required for non-current assets under ASPE. 
C) The revaluation model is optional for non-current assets under IFRS. 
D) The revaluation model is optional for non-current assets under ASPE. 
A) The revaluation model is required for non-current assets under IFRS. 
B) The revaluation model is required for non-current assets under ASPE. 
C) The revaluation model is optional for non-current assets under IFRS. 
D) The revaluation model is optional for non-current assets under ASPE.

Question 16

Which statement is correct?

Accepted Answer

A) Agricultural activity relates to the point of harvest and beyond. 
B) Agricultural activity includes fishing from the open ocean. 
C) Agricultural activity includes logging from unmanaged forests. 
D) Agricultural activity involves transforming biological assets. 
A) Agricultural activity relates to the point of harvest and beyond. 
B) Agricultural activity includes fishing from the open ocean. 
C) Agricultural activity includes logging from unmanaged forests. 
D) Agricultural activity involves transforming biological assets.

Question 17

What are "costs of disposal"?

Accepted Answer

A) The incremental costs directly attributable to the disposal of an asset. 
B) The incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense. 
C) The incremental costs directly attributable to the disposal of an asset, excluding finance costs. 
D) The amount obtainable from the sale of an asset in an arm's-length transaction between knowledgeable, willing parties. 
A) The incremental costs directly attributable to the disposal of an asset. 
B) The incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense. 
C) The incremental costs directly attributable to the disposal of an asset, excluding finance costs. 
D) The amount obtainable from the sale of an asset in an arm's-length transaction between knowledgeable, willing parties.

Question 18

Explain how an impairment loss is recorded for non-current assets.

Accepted Answer

An impairment loss is recorded by writin

Question 19

Information about the PPE for Jeremy Inc. is provided below. The company held the land and building to earn rental income and appropriately applied the fair value model for the land and building. Assume that the company takes a full of depreciation each year under the straight line method.
The company decided to use the building as its new head office at the beginning of year 3.
Prepare the journal entries required to record the change in use for Year 3.

Accepted Answer

The answer of Information about the PPE for Jeremy Inc....

Question 20

What is the recoverable amount for this product line?

Accepted Answer

A) $900,000 
B) $3,100,000 
C) $4,000,000 
D) $4,100,000 
A) $900,000 
B) $3,100,000 
C) $4,000,000 
D) $4,100,000

Based on the following information, what is the net book value of the asset on the December 31, 2012 balance sheet?

What is "agricultural activity"?

Which of the following is correct with respect to the accounting for "investment properties"?

Explain when a non-current asset is impaired.

Explain how non-current assets that are part of a discontinued operation should be accounted for.

How is an impairment loss allocated to the non-current asset(s)?

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

Company Nine purchased land for $600,000 some years ago. Fair value was $800,000 at the beginning of this year and $350,000 at the end of this year. Prepare the journal entry to record this year's revaluation adjustment.

Which statement describes the "historical cost model"?

Explain the meaning of biological assets and agricultural produce. Classify each of the following items as: biological asset, agricultural produce, or neither.

Which statement is correct?

Which statement is correct?

What are "costs of disposal"?

Explain how an impairment loss is recorded for non-current assets.

What is the recoverable amount for this product line?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Intangible Assets, Goodwill, Mineral Resources, and Government Grants

Filters

Exam 10: Applications of Fair Value to Non-Current Assets

Based on the following information, what is the net book value of the asset on the December 31, 2012 balance sheet?

What is "agricultural activity"?

Which of the following is correct with respect to the accounting for "investment properties"?

Explain when a non-current asset is impaired.

Explain how non-current assets that are part of a discontinued operation should be accounted for.

How is an impairment loss allocated to the non-current asset(s)?

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

Company Nine purchased land for $600,000 some years ago. Fair value was $800,000 at the beginning of this year and $350,000 at the end of this year. Prepare the journal entry to record this year's revaluation adjustment.

Which statement describes the "historical cost model"?

Explain the meaning of biological assets and agricultural produce. Classify each of the following items as: biological asset, agricultural produce, or neither.

Which statement is correct?

Which statement is correct?

What are "costs of disposal"?

Explain how an impairment loss is recorded for non-current assets.

What is the recoverable amount for this product line?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Intangible Assets, Goodwill, Mineral Resources, and Government Grants

Filters