Chapter 11, Problem 11.11P

Which of the following is NOT correct?  i. Initial allowance is claimable in the year the qualifying expenditure is incurred; however, it can be deferred to another year. ii. Annual allowance is not given in the year of disposal. iii. Annual allowance may be granted if a qualifying asset is temporarily out of use. iv. Capital allowance is granted instead of depreciation for all assets.

Which of the following is NOT correct? i. Initial allowance is claimable in the year the qualifying expenditure is incurred; however, it can be deferred to another year. ii. Annual allowance is not given in the year of disposal. iii. Annual allowance may be granted if a qualifying asset is temporarily out of use. iv. Capital allowance is granted instead of depreciation for all assets a. ii and iv b. i only c. i, and iv d. ii and iii

At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.

IFRS requires annual reviews of long-lived assets (other than goodwill) for reversal indicators. A loss may be reversed up to the newly estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation. This is a significant departure from GAAP, so what are the financial statement implications? Is it a good thing or bad?

If the estimated useful life of equipment changes, then this change requires OO a retroactive change in the amount of the periodic depreciation recognized in previous years. that income for the current year be increased. that the amount of the periodic depreciation be changed in the current year and in future years. that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset.   Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

You use the supplier invoice to populate the "No. of months of depreciation in the current period" in the depreciation expense recalculation template for a selected item. Based on this input, the template automatically calculates certain values. Which step are you performing in the depreciation expense recalculation? Recalculate the depreciation expense. Vouch the data used in the calculation to relevant documentation. Review the audit file for disconfirming evidence. Compare the recalculated amounts to the amount recorded in the property, plant and equipment system.

In 2019, the Hermes Corporation failed to record $8,000 in depreciation expense. The error was discovered in May of 2020. Required. Make the appropriate joumal entry in the books of Hermes Corporation in the year 2020.

A major addition to equipment should have been capitalized in the year 2021 but was incorrectly expensed. What would the impact on asset value and income be?

Which of the following must be recorded in the accounting records when an asset that is NOT held for sale is derecognized?     A Removal of the asset. B Gain or loss on derecognition. C All of the above items must be recorded in the accounting records. D Depreciation up until the date of derecognition.