Smith Inc wishes to use the revaluation model for this property: \[\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\ \hline \text { Building Gross Value } & 120,000 \\ \hline \text { Building Accumulated Depreciation } & 60,000 \\ \hline \text { Net carrying value } & 60,000 \\ \hline \end{array}\] 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 would be booked to accumulated depreciation in the year subsequent to the revaluation?

A) $12,000 debit. B) $12,000 credit. C) $30,000 credit. D) $30,000 debit. A) $12,000 debit. B) $12,000 credit. C) $30,000 credit. D) $30,000 debit.

Based on the following information, what is the net amount that this equipment should be reported at on FlexiHose's balance sheet at December 31, 2021? \[\begin{array} { | l | r | } \hline \text { Cost } & \$ 500,000 \\ \hline \text { Accumulated depreciation } & 250,000 \\ \hline \text { Value in use (sum of discounted cash flows) } & 220,000 \\ \hline \text { Fair value } & 240,000 \\ \hline \text { Disposal costs } & 10,000 \\ \hline \end{array}\]

A) $220,000 B) $230,000 C) $240,000 D) $250,000 A) $220,000 B) $230,000 C) $240,000 D) $250,000

Grover Inc wishes to use the revaluation model for this property: \[\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\ \hline \text { Building Gross Value } & 120,000 \\ \hline \text { Building Accumulated Depreciation } & 40,000 \\ \hline \text { Net carrying value } & 80,000 \\ \hline \end{array}\] -According to the table above.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 proportional method to record the revaluation?

A) $0 B) $10,000 debit. C) $10,000 credit. D) $20,000 debit. A) $0 B) $10,000 debit. C) $10,000 credit. D) $20,000 debit.

Smith Inc wishes to use the revaluation model for this property: \[\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\ \hline \text { Building Gross Value } & 120,000 \\ \hline \text { Building Accumulated Depreciation } & 60,000 \\ \hline \text { Net carrying value } & 60,000 \\ \hline \end{array}\] 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?

A) $0 B) $60,000 debit. C) $60,000 credit. D) $90,000 credit. A) $0 B) $60,000 debit. C) $60,000 credit. D) $90,000 credit.

Grover Inc wishes to use the revaluation model for this property: \[\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\ \hline \text { Building Gross Value } & 120,000 \\ \hline \text { Building Accumulated Depreciation } & 40,000 \\ \hline \text { Net carrying value } & 80,000 \\ \hline \end{array}\] -According to the table above.The fair value for the property is $100,000. What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the elimination method to record the revaluation?

A) $20,000 credit. B) $40,000 debit. C) $40,000 credit. D) $80,000 debit. A) $20,000 credit. B) $40,000 debit. C) $40,000 credit. D) $80,000 debit.

What is the recoverable amount for this product line? \[\begin{array} { | l | r | } \hline & \text { Product BGF } \\ \hline \text { Original cost } & \$ 10,200,000 \\ \hline \text { Accumulated depreciation } & 6,100,000 \\ \hline \text { Fair value } & 6,500,000 \\ \hline \text { Costs to sell } & 1,500,000 \\ \hline \text { Value in use } & 4,000,000 \\ \hline \end{array}\]

A) $100,000 B) $4,000,000 C) $4,100,000 D) $5,000,000 A) $100,000 B) $4,000,000 C) $4,100,000 D) $5,000,000

Stay Dry Raincoats uses three different machines (A, B, and C)to manufacture raincoats. These machines are considered to be a cash generating unit (CGU). Due to climate change and changes in consumer preferences, demand for raincoats has declined in recent years. The following information is relevant to the evaluation of impairment. $\begin{array}{c} \begin{array}{|l} \hline \text { } \\ \hline \text { Net carrying value} \\ \hline \text { Fair value less costs to sell} \\ \hline \text { Value in use } \\ \hline \end{array} \begin{array}{|r|} \hline\mathrm{A} \\ \hline 800,000 \\ \hline 1,000,000 \\ \hline \text { NA } \\ \hline \end{array} \begin{array}{r} \hline\mathrm{B} \\ \hline 1,430,000 \\ \hline 1,330,000 \\ \hline \text { NA }\\ \hline \end{array} \begin{array}{|r|} \hline\mathrm{C} \\ \hline 1,170,000 \\ \hline 670,000 \\ \hline \text { NA }\\ \hline \end{array} \begin{array}{r|} \hline\text { Total } \\ \hline 3,400,000 \\ \hline 3,000,000 \\ \hline 2,700,000\\ \hline \end{array} \end{array}$ Required: Determine the amount of impairment loss that should be recorded for the cash generating unit and for each of the three machines.

Note that Machine A is not impaired beca

Wallace Inc wishes to use the revaluation model for this property: \[\begin{array} { | l | r | } \hline & \text { Before Revaluation } \\ \hline \text { Building Gross Value } & 150,000 \\ \hline \text { Building Accumulated Depreciation } & 70,000 \\ \hline \text { Net carrying value } & 80,000 \\ \hline \end{array}\] 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?

A) $20,000 debit. B) $20,000 credit. C) $70,000 debit. D) $80,000 credit. A) $20,000 debit. B) $20,000 credit. C) $70,000 debit. D) $80,000 credit.

The following information is available about Fred Inc's discontinued operations: \[\begin{array} { | l | r | } \hline \text { Profit attributable to discontinued operations (before taxes) } & \$ 1,700,000 \\ \hline \text { Net loss on disposal } & 200,000 \\ \hline \text { Income taxes attributable to discontinued operations } & 100,000 \\ \hline \end{array}\] What single amount will be presented on Fred's statement of comprehensive income?

A) $1,400,000 B) $1,500,000 C) $1,600,000 D) $1,700,000 A) $1,400,000 B) $1,500,000 C) $1,600,000 D) $1,700,000

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, 2019. Relevant information is as follows: \[\begin{array} { | l | r | r | } \hline & \text { Dried beans } & \text { Canned beans } \\ \hline \text { Original cost } & \$ 7,222,000 & \$ 12,536,000 \\ \hline \text { Accumulated depreciation } & 2,500,000 & 4,200,000 \\ \hline \text { Fair value } & 5,062,000 & 8,916,000 \\ \hline \text { Costs to sell } & 90,000 & 340,000 \\ \hline \text { Risk adjusted cost of capital } & 5 \% & 5 \% \\ \hline & & \\ \hline \text { Incremental cash flows for } & & \\ \hline 2020 & \$ 800,000 & \$ 2,400,000 \\ \hline 2021 & 1,200,000 & 3,400,000 \\ \hline 2022 & 1,300,000 & 3,700,000 \\ \hline 2023 & 1,700,000 & 0 \\ \hline 2024 \text { and thereafter } & 0 & 0 \\ \hline \end{array}\] Required: Determine whether either product line is impaired, and if so, the amount of the impairment.

Dried beans \[\begin{array} { | l | r |

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

Smith Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 60,000 Net carrying value 60,000 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 would be booked to accumulated depreciation in the year subsequent to the revaluation?

(Multiple Choice)

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Question 101

Based on the following information, what is the net amount that this equipment should be reported at on FlexiHose's balance sheet at December 31, 2021? Cost \ 500,000 Accumulated depreciation 250,000 Value in use (sum of discounted cash flows) 220,000 Fair value 240,000 Disposal costs 10,000

(Multiple Choice)

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Question 102

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

(Multiple Choice)

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Question 103

Explain the accounting under the revaluation model available under IFRS.

(Essay)

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Question 104

What is a "component" of an entity?

(Multiple Choice)

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Question 105

Grover Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 40,000 Net carrying value 80,000 -According to the table above.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 proportional method to record the revaluation?

(Multiple Choice)

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Question 106

When does agricultural activity end?

(Multiple Choice)

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Question 107

Smith Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 60,000 Net carrying value 60,000 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?

(Multiple Choice)

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Question 108

Which statement is correct?

(Multiple Choice)

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Question 109

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

(Multiple Choice)

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Question 110

Grover Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 40,000 Net carrying value 80,000 -According to the table above.The fair value for the property is $100,000. What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the elimination method to record the revaluation?

(Multiple Choice)

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Question 111

What is the recoverable amount for this product line? Product BGF Original cost \ 10,200,000 Accumulated depreciation 6,100,000 Fair value 6,500,000 Costs to sell 1,500,000 Value in use 4,000,000

(Multiple Choice)

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Question 112

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

(Essay)

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Question 113

Stay Dry Raincoats uses three different machines (A, B, and C)to manufacture raincoats. These machines are considered to be a cash generating unit (CGU). Due to climate change and changes in consumer preferences, demand for raincoats has declined in recent years. The following information is relevant to the evaluation of impairment. Net carrying value Fair value less costs to sell Value in use 800,000 1,000,000 NA 1,430,000 1,330,000 NA 1,170,000 670,000 NA Total 3,400,000 3,000,000 2,700,000 Required: Determine the amount of impairment loss that should be recorded for the cash generating unit and for each of the three machines.

(Essay)

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Question 114

What information is not necessary about discontinued operations in the statement of comprehensive income or in the notes?

(Multiple Choice)

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Question 115

Wallace Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 150,000 Building Accumulated Depreciation 70,000 Net carrying value 80,000 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?

(Multiple Choice)

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Question 116

The following information is available about Fred Inc's discontinued operations: Profit attributable to discontinued operations (before taxes) \ 1,700,000 Net loss on disposal 200,000 Income taxes attributable to discontinued operations 100,000 What single amount will be presented on Fred's statement of comprehensive income?

(Multiple Choice)

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Question 117

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, 2019. Relevant information is as follows: Dried beans Canned beans Original cost \ 7,222,000 \ 12,536,000 Accumulated depreciation 2,500,000 4,200,000 Fair value 5,062,000 8,916,000 Costs to sell 90,000 340,000 Risk adjusted cost of capital 5\% 5\% Incremental cash flows for 2020 \ 800,000 \ 2,400,000 2021 1,200,000 3,400,000 2022 1,300,000 3,700,000 2023 1,700,000 0 2024 and thereafter 0 0 Required: Determine whether either product line is impaired, and if so, the amount of the impairment.

(Essay)

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Question 118

Which statement is not correct?

(Multiple Choice)

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Question 119

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

(Multiple Choice)

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Question 120

Based on the following information, what is the net amount that this equipment should be reported at on FlexiHose's balance sheet at December 31, 2021? Cost \ 500,000 Accumulated depreciation 250,000 Value in use (sum of discounted cash flows) 220,000 Fair value 240,000 Disposal costs 10,000

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

Explain the accounting under the revaluation model available under IFRS.

What is a "component" of an entity?

When does agricultural activity end?

Which statement is correct?

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

What is the recoverable amount for this product line? Product BGF Original cost \ 10,200,000 Accumulated depreciation 6,100,000 Fair value 6,500,000 Costs to sell 1,500,000 Value in use 4,000,000

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

What information is not necessary about discontinued operations in the statement of comprehensive income or in the notes?

Which statement is not correct?

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

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