INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Explain the appropriate treatment required when an error in accounting for property, plant, and equipment and intangible assets is discovered.
The auditor assigned to audit the property, plant and equipment requested a schedule of property additions for the year as well as a schedule of repairs and maintenance expense,
which of the following is incorrect?
O The audit proposition that a capitalizable cost might have been erroneously charged as outright repairs and maintenance expense is necessary to audit the completeness assertion of PPE additions.
O Tracing property additions to the physical asset is necessary to audit the existence assertion over PPE.
O Items in the schedule of repairs and maintenance shall be vouched to the supporting documents to ascertain whether these are indeed to be recognized as outright expense. This is necessary to audit the
occurrence assertion of the expense.
Items in the schedule of property additions shall be traced back to the supporting documents to verify their propriety. This is necessary to audit the completeness assertion over PPE additions.
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.
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...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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 Carrow_forwardWhich 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_forward
- Plant 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_forwardEstimate 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_forward
- Which 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_forwardExplain and evaluate the eff ects on financial statements and ratios of impairment, revaluation, and derecognition of property, plant, and equipment and intangible assets.arrow_forwardYou 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.arrow_forward
- Plant 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. Items (a) Improvement. select between capitalized or expensed ExpensedCapitalized (b) Replacement of a minor broken part on a machine. select between capitalized or expensed CapitalizedExpensed (c) Expenditure that increases the useful life of an existing asset. select between capitalized or expensed ExpensedCapitalized (d) Expenditure that increases the efficiency and effectiveness of a productive asset but…arrow_forwardAuditors should obtain evidence that there are no significant amounts of unrecorded retirements of property, plant and equipment. a. Describe two ways that the auditors obtain evidence that there are no significant amounts of unrecorded retirements of property (land).arrow_forwardDetermine the following as a result of your audit:16. How much is the cost of Land disclosed in its notes to financial statement as component of property,plant and equipment – net as of December 31, 2022?17. How much is the cost of Land Improvements disclosed in its notes to financial statement ascomponent of property, plant and equipment – net as of December 31, 2022?18. How much is the cost of Building disclosed in its notes to financial statement as component ofproperty, plant and equipment – net as of December 31, 2022?19. How much is the cost of Machineries disclosed in its notes to financial statement as component ofproperty, plant and equipment – net as of December 31, 2022?20. How much is the amount of Depreciation expense reported by Fix You Company in its statement ofcomprehensive income for the period ending December 31, 2022?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Property, Plant and Equipment (PP&E) - Introduction to PPE; Author: Gleim Accounting;https://www.youtube.com/watch?v=e_Hx-e-h9M4;License: Standard Youtube License