Question 1

Gonzaga Company has used the double-declining-balance method for depreciation since it started business in 2009. At the beginning of 2013, the company decided to change to the straight-line method. Depreciation as reported and what it would have been reported if the company had always used straight-line is listed below:  Required:
What journal entry, if any, should Gonzaga make to record the effect of the accounting change (ignore income taxes)? Explain.

Accepted Answer

The change in depreciation method is tre...

Question 2

Required:
Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the units-of-production method is used.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> 2013 depreciation: ...

Question 3

The factors that need to be determined to compute depreciation are an asset's:

Accepted Answer

A)  Cost, residual value, and physical life.
B)  Cost, replacement value, and service life.
C)  Fair value, residual value, and economic life.
D)  Cost, residual value, and service life.E) None of the above
F) C) and D)

Question 4

International Financial Reporting Standards require goodwill to be tested for impairment at least annually.

Accepted Answer

A) True 
 B)False

Question 5

Using the straight-line method, depreciation for 2014 and book value at December 31, 2014, would be:

Accepted Answer

A)  $10,000 and $20,000.
B)  $10,000 and $25,000.
C)  $11,250 and $17,500.
D)  $11,250 and $22,500.E) A) and B)
F) B) and D)

Question 6

Using the double-declining balance method, depreciation for 2013 and book value at December 31, 2013, would be:

Accepted Answer

A)  $22,500 and $22,500.
B)  $22,500 and $17,500.
C)  $20,000 and $25,000.
D)  $20,000 and $20,000.E) None of the above
F) C) and D)

Question 7

Accounting for impairment losses:

Accepted Answer

A)  Involves a two-step process for recoverability and measurement.
B)  Applies only to depreciable assets.
C)  Applies only to assets with finite lives.
D)  All of the above are correct.E) All of the above
F) B) and C)

Question 8

Asset C3PO has a depreciable base of $16.5 million and a service life of 10 years. What would the accumulated depreciation be at the end of year five under the sum-of-the-years' digits method?

Accepted Answer

A)  $4.5 million.
B)  $8.25 million.
C)  $12 million.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 9

According to International Financial Reporting Standards, the revaluation of equipment when fair value exceeds book value, results in:

Accepted Answer

A)  An increase in net income.
B)  A decrease in net income.
C)  An increase in other comprehensive income.
D)  A decrease in other comprehensive income.E) All of the above
F) None of the above

Question 10

According to International Financial Reporting Standards, the impairment loss for property, plant, and equipment is the difference between book value and:

Accepted Answer

A)  The undiscounted sum of estimated future cash flows.
B)  The present value of future cash flows.
C)  Fair value less costs to sell.
D)  The higher of the present value of estimated future cash flows and the fair value less costs to sell.E) B) and C)
F) A) and B)

Question 11

Using the sum-of-the-years'-digits method, depreciation for 2013 and book value at December 31, 2013, would be:

Accepted Answer

A)  $22,000 and $44,000.
B)  $22,000 and $50,000.
C)  $24,000 and $48,000.
D)  $24,000 and $42,000.E) C) and D)
F) A) and B)

Question 12

Using the sum-of-the years'-digits method, depreciation for 2014 and book value at December 31, 2014, would be

Accepted Answer

A)  $13,500 and $13,500.
B)  $13,500 and $8,500.
C)  $12,000 and $17,000.
D)  $12,000 and $12,000.E) C) and D)
F) None of the above

Question 13

In testing for recoverability of property, plant, and equipment, an impairment loss is required if the:

Accepted Answer

A)  Asset's book value exceeds the undiscounted sum of expected future cash flows.
B)  Undiscounted sum of its expected future cash flows exceeds the asset's book value.
C)  Present value of expected future cash flows exceeds its book value.
D)  None of the above is correct.E) A) and B)
F) B) and D)

Question 14

Required:
Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the straight-line method is used.

Accepted Answer

The answer of Required:
Compute depreciation for 2013 and 2014 and...

Question 15

An asset should be written down if there has been an impairment of value that is:

Accepted Answer

A)  Relevant and objectively determined.
B)  Material and market driven.
C)  Unplanned and sudden.
D)  Significant.E) C) and D)
F) A) and D)

Question 16

Short Corporation purchased Hathaway, Inc., for $52,000,000. The fair value of all Hathaway's identifiable tangible and intangible assets was $48,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition?

Accepted Answer

A)  $100,000.
B)  $400,000.
C)  $200,000.
D)  $0.E) A) and C)
F) All of the above

Question 17

According to International Financial Reporting Standards, biological assets are valued at:

Accepted Answer

A)  Cost less accumulated depreciation.
B)  Fair value less estimated costs to sell.
C)  Cost less accumulated depletion.
D)  None of the above.E) A) and B)
F) All of the above

Question 18

Using the straight-line method, depreciation for 2014 and the equipment's book value at December 31, 2014, would be:

Accepted Answer

A)  $14,400 and $43,200.
B)  $28,800 and $37,200.
C)  $13,200 and $39,600.
D)  $13,200 and $45,600.E) B) and D)
F) None of the above

Question 19

Required:
Compute depreciation for 2013 and 2014 and the book value of the spooler at December 31, 2013 and 2014, assuming the straight-line method is used.

Accepted Answer

The answer of Required:
Compute depreciation for 2013 and 2014 and...

Question 20

Entry to record the impairment loss:

Accepted Answer

The answer of Entry to record the impairment loss:...

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

An asset should be written down if there has been an impairment of value that is:

Correct Answer
verified

Correct Answer
verified
The change in depreciation method is tre...
View Answer

In testing for recoverability of property, plant, and equipment, an impairment loss is required if the:

Correct Answer
verified

The factors that need to be determined to compute depreciation are an asset's:

Correct Answer
verified

According to International Financial Reporting Standards, biological assets are valued at:

Correct Answer
verified

Required: Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the units-of-production method is used.

Correct Answer
verified
2013 depreciation: ...
View Answer

Using the double-declining balance method, depreciation for 2013 and book value at December 31, 2013, would be:

Correct Answer
verified

According to International Financial Reporting Standards, the revaluation of equipment when fair value exceeds book value, results in:

Correct Answer
verified

Asset C3PO has a depreciable base of $16.5 million and a service life of 10 years. What would the accumulated depreciation be at the end of year five under the sum-of-the-years' digits method?

Correct Answer
verified

Accounting for impairment losses:

Correct Answer
verified

According to International Financial Reporting Standards, the impairment loss for property, plant, and equipment is the difference between book value and:

Correct Answer
verified

Using the sum-of-the years'-digits method, depreciation for 2014 and book value at December 31, 2014, would be

Correct Answer
verified

Required: Compute depreciation for 2013 and 2014 and the book value of the spooler at December 31, 2013 and 2014, assuming the straight-line method is used.

Correct Answer
verified

International Financial Reporting Standards require goodwill to be tested for impairment at least annually.

Correct Answer
verified

Using the sum-of-the-years'-digits method, depreciation for 2013 and book value at December 31, 2013, would be:

Correct Answer
verified

Required: Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the straight-line method is used.

Correct Answer
verified

Using the straight-line method, depreciation for 2014 and the equipment's book value at December 31, 2014, would be:

Correct Answer
verified

Using the straight-line method, depreciation for 2014 and book value at December 31, 2014, would be:

Correct Answer
verified

Entry to record the impairment loss:

Correct Answer
verified

Short Corporation purchased Hathaway, Inc., for $52,000,000. The fair value of all Hathaway's identifiable tangible and intangible assets was $48,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition?

Correct Answer
verified

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

An asset should be written down if there has been an impairment of value that is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe change in depreciation method is tre...View AnswerShow Answer

In testing for recoverability of property, plant, and equipment, an impairment loss is required if the:

Correct AnswerverifiedShow Answer

The factors that need to be determined to compute depreciation are an asset's:

Correct AnswerverifiedShow Answer

According to International Financial Reporting Standards, biological assets are valued at:

Correct AnswerverifiedShow Answer

Required: Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the units-of-production method is used.

Correct Answerverified 2013 depreciation: ...View AnswerShow Answer

Using the double-declining balance method, depreciation for 2013 and book value at December 31, 2013, would be:

Correct AnswerverifiedShow Answer

According to International Financial Reporting Standards, the revaluation of equipment when fair value exceeds book value, results in:

Correct AnswerverifiedShow Answer

Asset C3PO has a depreciable base of $16.5 million and a service life of 10 years. What would the accumulated depreciation be at the end of year five under the sum-of-the-years' digits method?

Correct AnswerverifiedShow Answer

Accounting for impairment losses:

Correct AnswerverifiedShow Answer

According to International Financial Reporting Standards, the impairment loss for property, plant, and equipment is the difference between book value and:

Correct AnswerverifiedShow Answer

Using the sum-of-the years'-digits method, depreciation for 2014 and book value at December 31, 2014, would be

Correct AnswerverifiedShow Answer

Required: Compute depreciation for 2013 and 2014 and the book value of the spooler at December 31, 2013 and 2014, assuming the straight-line method is used.

Correct AnswerverifiedShow Answer

International Financial Reporting Standards require goodwill to be tested for impairment at least annually.

Correct AnswerverifiedShow Answer

Using the sum-of-the-years'-digits method, depreciation for 2013 and book value at December 31, 2013, would be:

Correct AnswerverifiedShow Answer

Required: Compute depreciation for 2013 and 2014 and the book value of the drill press at December 31, 2013 and 2014, assuming the straight-line method is used.

Correct AnswerverifiedShow Answer

Using the straight-line method, depreciation for 2014 and the equipment's book value at December 31, 2014, would be:

Correct AnswerverifiedShow Answer

Using the straight-line method, depreciation for 2014 and book value at December 31, 2014, would be:

Correct AnswerverifiedShow Answer

Entry to record the impairment loss:

Correct AnswerverifiedShow Answer

Short Corporation purchased Hathaway, Inc., for $52,000,000. The fair value of all Hathaway's identifiable tangible and intangible assets was $48,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition?

Correct AnswerverifiedShow Answer

Correct Answer
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The change in depreciation method is tre...
View Answer

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2013 depreciation: ...
View Answer

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