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

Based on the following information, what is the net amount that this equipment should be reported at on BAC's balance sheet at December 31, 2012?

How should a revaluation entry generally not be booked?

Based on the following information, what is the recoverable amount for the impairment test?

What is a "disposal group"?

Which of the following is not a concept supporting impairment testing?

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000. 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?

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000. Assuming this is the first year of using the revaluation model, what amount would be booked to the "other comprehensive income" account if Smith chooses to use the proportional method to record the revaluation?

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

Explain how an impairment loss is allocated to non-current assets that are part of a cash generating unit.

What is the recoverable amount for this product line?

Which statement is correct?

A company owns an office building that it rents out to other businesses. Due to a downturn in the economy, rental rates have dropped while vacancy rates have increased. Due to these circumstances, the company evaluated the building for impairment. The building has a cost of $70 million, accumulated depreciation of $47.05 million, and a value in use of $20 million. In addition, the company has recently received an offer to purchase the building for $22 million. Legal and other costs necessary to complete a sale of this type would amount to $200,000. Required: Determine the amount of impairment, if any.

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000. Assuming this is the first year of using the revaluation model, what amount would be booked to profit and loss if Smith chooses to use the elimination method to record the revaluation?

What is "value in use"?

Wilson Inc wishes to use the revaluation model for this property: The fair value for the property is $40,000. 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?

Wallace Inc wishes to use the revaluation model for this property: The fair value for the property is $60,000. What amount would be booked to the "accumulated depreciation" account if Wallace chooses to use the elimination method to record the revaluation?

Wilson Inc wishes to use the revaluation model for this property: The fair value for the property is $20,000. Assuming this is the first year of using the revaluation model, what amount would be booked to the "other comprehensive income" account if Wilson chooses to use the proportional method to record the revaluation?

Which of the following is correct with respect to the "fair value model"?

Wallace Inc wishes to use the revaluation model for this property: The fair value for the property is $60,000. Assuming this is the first year of using the revaluation model, what amount would be booked to profit and loss if Wallace chooses to use the elimination method to record the revaluation?

Wilson Inc wishes to use the revaluation model for this property: The fair value for the property is $140,000. Assuming this is the first year of using the revaluation model, which of the following amounts will be booked?