Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 11, Problem 11.21E
1.
To determine
Amortization:
Itis the process of allocating the value of the intangible assets over its estimated useful life.
Intangible Assets:
These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark,
To Calculate: The amortization for the year 2018.
2.
To determine
To Prepare: The
3.
To determine
To Calculate: The amortization for the year 2019.
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P10.1
(LO 1 ) (Classification of Acquisition and Other Asset Costs) At December 31, 2019, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances.
Land
$230,000
Buildings
890,000
Leasehold improvements
660,000
Equipment
875,000
During 2020, the following transactions occurred.
1.Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.
2.A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the…
Hw.27.
Entity A entered into a sale and repurchase agreement for its head office on 1 January 2022, selling the office to Bank B for $78,560,000. On the same date, the head office had a fair value of $97,800,000. Entity A will continue to use the head office for the next 2 years and has the option to buy back the property for $93,765,779, based on an effective interest rate of 9.25% per year over the next 2 years. Property prices are expected to increase over the next 2 years.
REQUIRED:
Measure the net amount to be shown in the Statement of Profit or Loss for the year ended 31 December 2022.
1.
$7,938,979 Expense
2.
$19,240,000 Expense
3.
$0
4.
$7,266,800 Expense
5.
None of them.
P11.1
(LO 2 ) (Depreciation for Partial Period—SL, SYD, and DDB) Alladin Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May.
Price
$85,000
Credit terms
2/10, n/30
Freight-in
$ 800
Preparation and installation costs
$ 3,800
Labor costs during regular production operations
$10,500
It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Alladin intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $1,500. The invoice for Machine #201 was paid May 5, 2020. Alladin uses the calendar year as the basis for the preparation of financial statements.
Instructions
a.
Compute the depreciation expense for the years indicated using the following methods. (Round to the nearest dollar.)
1.Straight-line method for 2020.
2.Sum-of-the-years'-digits method for 2021.…
Chapter 11 Solutions
Intermediate Accounting
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