Question 1

Belotti would record depletion in 2013 of:

Accepted Answer

A) $41,000. 
B) $32,800. 
C) $30,750. 
D) $24,600. 
A) $41,000. 
B) $32,800. 
C) $30,750. 
D) $24,600. B

Question 2

Changes in the estimates involved in depreciation, depletion, and amortization require retroactive restatement of financial statements.

Accepted Answer

A) True 
 B)False  False

Question 3

Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2013, for $4 million. The patent will be used for 5 years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years. Compute Granite's patent amortization for 2013, assuming the straight-line method is used.

Accepted Answer

A) $380,000. 
B) $400,000. 
C) $760,000. 
D) $800,000. 
A) $380,000. 
B) $400,000. 
C) $760,000. 
D) $800,000. C

Question 4

Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

Accepted Answer

A) Straight-line. 
B) Units-of-production. 
C) Double-declining balance. 
D) Sum-of-the-year's digits. 
A) Straight-line. 
B) Units-of-production. 
C) Double-declining balance. 
D) Sum-of-the-year's digits.

Question 5

Kentfield Corporation has $260 million of goodwill on its book from the 2010 acquisition of Seaford Shipping. At the end of its 2013 fiscal year, management has provided the following information for a required goodwill impairment test ($ in millions):   Required:
Assuming that Seaford is considered a reporting unit for U.S. GAAP and a cash-generating unit for IFRS, determine the amount of goodwill impairment loss that Kentfield should recognize according to U.S. GAAP and International Financial Reporting Standards.

Accepted Answer

U.S. GAAP: Since the book value of Seafo

Question 6

Depreciation for 2013: $350,000 ÷ 7 = $50,000 x 6/12 = $25,000
2.

Accepted Answer

@#IMG-DLM& *If a revaluation surplus account relat

Question 7

Prego would report depreciation in 2013 of:

Accepted Answer

A) $36,000. 
B) $43,900. 
C) $18,000. 
D) $21,950. 
A) $36,000. 
B) $43,900. 
C) $18,000. 
D) $21,950.

Question 8

Nanki Corporation purchased equipment on January 1, 2011, for $650,000. In 2011 and 2012, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $10,000 residual value. In 2013, due to changes in technology, Nanki revised the useful life to a total of six years with no residual value. What depreciation would Nanki record for the year 2013 on this equipment?

Accepted Answer

A) $108,333. 
B) $106,667. 
C) $122,500. 
D) None of the above is correct. 
A) $108,333. 
B) $106,667. 
C) $122,500. 
D) None of the above is correct.

Question 9

According to International Financial Reporting Standards, the costs to successfully defend an intangible right normally are capitalized and amortized.

Accepted Answer

A) True 
 B)False

Question 10

Using the straight-line method, the book value at December 31, 2013, would be:

Accepted Answer

A) $57,600. 
B) $51,600. 
C) $58,800. 
D) $52,800. 
A) $57,600. 
B) $51,600. 
C) $58,800. 
D) $52,800.

Question 11

A change from the straight-line method to the sum-of-years'-digits method of depreciation is handled as:

Accepted Answer

A) A retrospective change back to the date of acquisition as though the current estimated life had been used all along. 
B) A cumulative adjustment to income in the current year for the difference in depreciation under the new versus old useful life estimate. 
C) A prospective change from the current year through the remainder of its useful life. 
D) None of the above is correct. 
A) A retrospective change back to the date of acquisition as though the current estimated life had been used all along. 
B) A cumulative adjustment to income in the current year for the difference in depreciation under the new versus old useful life estimate. 
C) A prospective change from the current year through the remainder of its useful life. 
D) None of the above is correct.

Question 12

Property, plant, and equipment and finite-life intangible assets must be tested for impairment at least once a year.

Accepted Answer

A) True 
 B)False

Question 13

The table below contains data on depreciation for equipment.
Required:
Fill in the missing data in the table.

Accepted Answer

The answer of The table below contains data on depreciation...

Question 14

Canliss Mining uses the replacement method to determine depreciation on its office equipment. During 2011, its first year of operations, office equipment was purchased at a cost of $14,000. Useful life of the equipment averages four years and no salvage value is anticipated. In 2013, equipment costing $5,000 was sold for $600 and replaced with new equipment costing $6,000. Canliss would record 2013 depreciation of:

Accepted Answer

A) $3,500. 
B) $4,400. 
C) $5,400. 
D) None of the above is correct. 
A) $3,500. 
B) $4,400. 
C) $5,400. 
D) None of the above is correct.

Question 15

Fryer Inc. owns equipment for which it paid $90 million. At the end of 2013, it had accumulated depreciation on the equipment of $27 million. Due to adverse economic conditions, Fryer's management determined that it should assess whether an impairment loss should be recognized for the equipment. The estimated undiscounted future cash flows to be provided by the equipment total $60 million, and the equipment's fair value at that point is $40 million. Under these circumstances, Fryer:

Accepted Answer

A) Would record no impairment loss on the equipment. 
B) Would record a $3 million impairment loss on the equipment. 
C) Would record a $23 million impairment loss on the equipment. 
D) None of the above is correct. 
A) Would record no impairment loss on the equipment. 
B) Would record a $3 million impairment loss on the equipment. 
C) Would record a $23 million impairment loss on the equipment. 
D) None of the above is correct.

Question 16

An impairment loss is indicated because the estimated undiscounted sum of future cash flows of $30 million is less than the book value of $32.1 million.
The amount of the loss to be reported is calculated using the estimated fair value rather than the undiscounted future cash flows:

Accepted Answer

The answer of An impairment loss is indicated because the...

Question 17

The replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to:

Accepted Answer

A) Repairs. 
B) Equipment. 
C) Maintenance. 
D) Gain from repairs. 
A) Repairs. 
B) Equipment. 
C) Maintenance. 
D) Gain from repairs.

Question 18

A major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the expenditure to be debited to:

Accepted Answer

A) Repairs. 
B) Accumulated depreciation. 
C) Major repairs. 
D) None of the above. 
A) Repairs. 
B) Accumulated depreciation. 
C) Major repairs. 
D) None of the above.

Question 19

2013 depreciation:
Equipment: $100,000 ÷ 5 years = $20,000
Land improvements: $50,000 ÷ 20 years = $2,500

Accepted Answer

The answer of 2013 depreciation:
Equipment: $100,000 ÷ 5 years =...

Question 20

One of the advantages of group and composite methods is that gains and losses on the disposal of individual assets need not be computed.

Accepted Answer

A) True 
 B)False

Belotti would record depletion in 2013 of:

Changes in the estimates involved in depreciation, depletion, and amortization require retroactive restatement of financial statements.

Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

Depreciation for 2013: $350,000 ÷ 7 = $50,000 x 6/12 = $25,000 2.

Prego would report depreciation in 2013 of:

According to International Financial Reporting Standards, the costs to successfully defend an intangible right normally are capitalized and amortized.

Using the straight-line method, the book value at December 31, 2013, would be:

A change from the straight-line method to the sum-of-years'-digits method of depreciation is handled as:

Property, plant, and equipment and finite-life intangible assets must be tested for impairment at least once a year.

The table below contains data on depreciation for equipment. Required: Fill in the missing data in the table.

An impairment loss is indicated because the estimated undiscounted sum of future cash flows of $30 million is less than the book value of $32.1 million. The amount of the loss to be reported is calculated using the estimated fair value rather than the undiscounted future cash flows:

The replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to:

A major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the expenditure to be debited to:

2013 depreciation: Equipment: $100,000 ÷ 5 years = $20,000 Land improvements: $50,000 ÷ 20 years = $2,500

One of the advantages of group and composite methods is that gains and losses on the disposal of individual assets need not be computed.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Income Measurement and Profitability Analysis

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity Key

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters

Exam 11: Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment

Belotti would record depletion in 2013 of:

Changes in the estimates involved in depreciation, depletion, and amortization require retroactive restatement of financial statements.

Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

Depreciation for 2013: $350,000 ÷ 7 = $50,000 x 6/12 = $25,000 2.

Prego would report depreciation in 2013 of:

According to International Financial Reporting Standards, the costs to successfully defend an intangible right normally are capitalized and amortized.

Using the straight-line method, the book value at December 31, 2013, would be:

A change from the straight-line method to the sum-of-years'-digits method of depreciation is handled as:

Property, plant, and equipment and finite-life intangible assets must be tested for impairment at least once a year.

The table below contains data on depreciation for equipment. Required: Fill in the missing data in the table.

An impairment loss is indicated because the estimated undiscounted sum of future cash flows of $30 million is less than the book value of $32.1 million. The amount of the loss to be reported is calculated using the estimated fair value rather than the undiscounted future cash flows:

The replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to:

A major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the expenditure to be debited to:

2013 depreciation: Equipment: $100,000 ÷ 5 years = $20,000 Land improvements: $50,000 ÷ 20 years = $2,500

One of the advantages of group and composite methods is that gains and losses on the disposal of individual assets need not be computed.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Income Measurement and Profitability Analysis

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity Key

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters