Connect Online Access for International Accounting
5th Edition
ISBN: 9781260248463
Author: Doupnik, Timothy
Publisher: Mcgraw-hill Higher Education (us)
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Chapter 4, Problem 12EP
Changsha Corporation purchased an asset during the fourth quarter of the current fiscal year. It is now the end of the fiscal year, and the asset’s fair value exceeds its historical cost. In certain circumstances, IFRS allows or requires Changsha to carry the asset at fair value in its year-end
- a. The asset is a new home office that Changsha occupied immediately after the purchase.
- b. The asset is a broadcasting license with an indefinite useful life.
- c. The asset is an office park that is being rented to a tenant.
- d. The asset is 100 hectares of young trees that will eventually be turned into wood products.
- e. The asset is a vineyard consisting of mature grapevines.
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On January 1, 2021, Smith Company sold a piece of machinery to Gaby Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next three years, Smith Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:
Fair value of machinery - P2,200,000
Carrying amount of machinery - P1, 700,000
Remaining useful life of the machinery - 8 years
Lease term - 3 years
Annual rent payable at the end of each year beginning, December 31, 2021- P500,000
Market rate of interest - 10%
The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869
The present value of an annuity due of 1 at 10% for 3 periods is 2.7355
1. How much is the gain on sale-leaseback? (round off your final answer to the nearest peso value)
Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275 does not?
O
Comfort House has a loss contingency at the financial statement date, and it is remotely
A. possible that the estimate for this contingency will change by a material amount within the
next year.
B.
The Garden Foundation has an asset on which the depreciation will be recalculated due to the
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On January 1, 2021, Smith Company sold a piece of machinery to Gaby Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next three years, Smith Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:
Fair value of machinery - P2,200,000
Carrying amount of machinery - P1, 700,000
Remaining useful life of the machinery - 8 years
Lease term - 3 years
Annual rent payable at the end of each year beginning, December 31, 2021- P500,000
Market rate of interest - 10%
The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869
The present value of an annuity due of 1 at 10% for 3 periods is 2.7355
1. How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)…
Chapter 4 Solutions
Connect Online Access for International Accounting
Ch. 4 - Prob. 1QCh. 4 - How do IFRS and U.S. GAAP differ in their approach...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - Prob. 5QCh. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Where in the food products value chain are...
Ch. 4 - Prob. 11QCh. 4 - Prob. 12QCh. 4 - Prob. 13QCh. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - Prob. 16QCh. 4 - Prob. 17QCh. 4 - Prob. 18QCh. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 21QCh. 4 - How does the two-step model traditionally used for...Ch. 4 - How are borrowing costs accounted for under IFRS?Ch. 4 - Prob. 24QCh. 4 - 1. A company incurred the following costs related...Ch. 4 - 2. A company determined the following values for...Ch. 4 - Prob. 3EPCh. 4 - 4. On January 1, Year 1, an entity acquires a new...Ch. 4 - Prob. 5EPCh. 4 - 6. Under IFRS, an entity that acquires an...Ch. 4 - Prob. 7EPCh. 4 - Prob. 8EPCh. 4 - Prob. 9EPCh. 4 - Prob. 10EPCh. 4 - Prob. 11EPCh. 4 - Changsha Corporation purchased an asset during the...Ch. 4 - Prob. 13EPCh. 4 - Prob. 14EPCh. 4 - In the fourth quarter of Year 1, Beech Corporation...Ch. 4 - 16. This is a continuation of problem 15. At...Ch. 4 - 17. Steffen-Zweig Company exchanges two used...Ch. 4 - 18. Stevenson Corporation acquires a one-year-old...Ch. 4 - 19. Quick Company acquired a piece of equipment in...Ch. 4 - Prob. 20EPCh. 4 - 21. Jefferson Company acquired equipment on...Ch. 4 - 22. Madison Company acquired a depreciable asset...Ch. 4 - 29. Stratosphere Company acquires its only...Ch. 4 - QualCore Company began operations on January 1,...Ch. 4 - 26. Buch Corporation purchased Machine Z at the...Ch. 4 - Prob. 26EPCh. 4 - Prob. 27EPCh. 4 - Prob. 28EPCh. 4 - Prob. 29EPCh. 4 - Prob. 31EPCh. 4 - Prob. 33EPCh. 4 - Prob. 34EPCh. 4 - Prob. 35EPCh. 4 - Prob. 36EPCh. 4 - Prob. 37EP
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