INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 11, Problem 11.17Q
Explain the steps required to correct an error in accounting for property, plant, and equipment and intangible assets that is discovered in a year subsequent to the year the error was made.
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Explain the appropriate treatment required when an error in accounting for property, plant, and equipment and intangible assets is discovered.
Explain the appropriate accounting treatment required when a change is made in the service life or residual value of property, plant, and equipment and intangible assets.
Plant, property and equipment and limited life identifiable intangible assets are recorded at cost and depreciated or amortized over their estimated useful lives. Auditors must satisfy themselves that such assets are accurately recorded at their original costs plus:
a. their carrying amount is not impaired
b. The estimated useful lives being used for depreciation and amortization are reasonable based on current and expected usage of the asset.
c. depreciation and amortization are being calculated properly
d. all of the above
e. only B and C
Chapter 11 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Briefly explain the differences and similarities...Ch. 11 - Prob. 11.12QCh. 11 - Prob. 11.13QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Prob. 11.21QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Depreciation methods; partial periods LO112 Refer...Ch. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Group depreciation; disposal LO112 Mondale Winery...Ch. 11 - Prob. 11.8BECh. 11 - Prob. 11.9BECh. 11 - Prob. 11.10BECh. 11 - Change in principle; change in depreciation method...Ch. 11 - Prob. 11.12BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.14BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Prob. 11.2ECh. 11 - Depreciation methods; partial periods LO112 [This...Ch. 11 - Depreciation methods; asset addition; partial...Ch. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Depreciation methods; partial periods LO112 On...Ch. 11 - Prob. 11.7ECh. 11 - IFRS; depreciation; partial periods LO112, LO1110...Ch. 11 - IFRS; revaluation of machinery; depreciation;...Ch. 11 - Disposal of property, plant, and equipment LO112...Ch. 11 - Disposal of property, plant, and equipment;...Ch. 11 - Depreciation methods; disposal; partial periods ...Ch. 11 - Group depreciation LO112 Highsmith Rental Company...Ch. 11 - Double-declining-balance method; switch to...Ch. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Cost of a natural resource; depletion and...Ch. 11 - Prob. 11.18ECh. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Change in estimate; useful life and residual value...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Prob. 11.25ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - IFRS; Impairment; property, plant, and equipment ...Ch. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.30ECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Prob. 11.32ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.34ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Prob. 11.36ECh. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Retirement and replacement depreciation Appendix...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.2PCh. 11 - Depreciation methods; partial periods Chapters 10...Ch. 11 - Partial- year depreciation; asset addition;...Ch. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Straight-line depreciation; disposal; partial...Ch. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Prob. 11.12PCh. 11 - Depreciation and depletion; change in useful life;...Ch. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4BYPCh. 11 - Prob. 11.5BYPCh. 11 - Prob. 11.7BYPCh. 11 - Prob. 11.8BYPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Ethics Case 1110 Asset impairment LO118 At the...Ch. 11 - Prob. 11.11BYPCh. 11 - Prob. 11.13BYPCh. 11 - Real World Case 1114 Disposition and depreciation;...Ch. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16BYPCh. 11 - Target Case LO112, LO118, LO119 Target...
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- Which of the following is not a typical internal control over long-lived assets? a. Periodically reassess the appropriateness of depletion categories. b. Identify obsolete or scrapped equipment and write it down to scrap value. c. Reconcile physical asset inventory with the property ledger. d. Periodically review management strategy and systematically assess the impairment of assets.arrow_forwardDescribe the derecognition of property, plant, and equipment and intangible assetsarrow_forwardPlant assets often require expenditures subsequent to acquisition. It is important that they be accounted for properly. Any errors will affect both the balance sheets and income statements for a number of years. For each of the following items, indicate whether the expenditure should be capitalized or expensed in the period incurred. a. b. C. d. e. f. g. h. Improvement. Items Replacement of a minor broken part on a machine. Expenditure that increases the useful life of an existing asset. Expenditure that increases the efficiency and effectiveness of a productive asset but does not increase its salvage value. Expenditure that increases the efficiency and effectiveness of a productive asset and increases the asset's salvage value. Expenditure that increases the quality of the output of the productive asset. Improvement to a machine that increased its fair market value and its production capacity by 30% without extending the machine's useful life. Ordinary repairs. > > >arrow_forward
- Estimate the average total estimated useful life of depreciable property, plant, and equipment. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment?arrow_forward46 The auditor should test for unrecorded retirements of properties by _______________. This procedure is relevant for validating the __________ assertion over the properties. Group of answer choices Tracing physical assets observed while conducting an ocular inspection to the records; completeness. Vouching items in the property records to the acquisition source documents; existence. Recomputing the depreciation charges on the properties; valuation. Selecting items in the property records and then tracing them back to the physical assets while conducting an ocular inspection of the properties, existence.arrow_forwardWhich one of the following items is not a consideration when recording periodic depreciation expense on plant assets? a. Salvage value b. Estimated useful life c. Cash needed to replace the plant asset d. Costarrow_forward
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- What method is used in the Evaluation Phase of intangible assetsarrow_forwardIdentify impairment procedures and presentation requirements for intangible assets.arrow_forwardIn this session, we discuss property acquisitions and dispositions. In financial accounting, the acquisition of assets means that specific procedures will be followed, including computing the depreciable cost of the asset and estimating its useful life. These steps are required to compute the depreciation for the acquired asset. The accounting treatment options vary including the use of Straight Line, Units of Production, or an accelerated method such as Declining Balance or Sum of the Years’ digits. (Heintz & Parry, 2017) If the asset is later sold before being fully depreciated, there may be an accounting gain or loss on disposal, depending on the circumstances. If assets are disposed of under the tax code, such disposal might trigger depreciation recapture. The deductions allowed under section 1231 allow for tax savings while reducing the taxpayer basis in the asset. Such a reduction in basis might be connected to a realized gain on the disposal of such an asset and allow the…arrow_forward
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