INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
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Chapter 11, Problem 11.1BYP
Analysis Case 11–1
• LO11–1
The terms depreciation, depletion, and amortization all refer to the process of allocating the cost of an asset to the periods the asset is used.
Required:
Discuss the differences between depreciation, depletion, and amortization as the terms are used in accounting for property, plant, and equipment and intangible assets.
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D
Question 9
The following assets can be defined as 'qualifying assets' except for:
inventories purchased ready for sale.
O manufacturing plants.
O power generation facilities
O investment properties.
QUESTION 17
Match the term on the left to the appropriate description on the right.
v Historical cost
A. The amount of a PP&E asset's acquisition cost that will be depreciated over the
asset's useful life
v Depreciable cost
B. An asset whose value derives from rights and privileges rather than physical
existence
v Salvage value
v Accumulated depreciation
C. The capitalized acquisition cost of an asset
v Intangible asset
v Amortization
D. The process of allocating an intangible asset's acquisition cost to expense over
its useful life
E. The book value of a fully-depreciated PP&E asset
F. The total amount of depreciation expense that has been recorded to-date for a
PP&E asset
Question 6
The cost of an intangible asset includes all acquisition costs plus expenditures to make it ready for its intended use.
O True
O False
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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- Question # 10 a. Over what period of time should the cost of a patent acquired by purchased be amortized? b. In general, what is the required accounting treatment for research and development costs? c. How should goodwill be amortized? they all come together is for question #10arrow_forwardQuestion 29 Replacement cost of an asset is related to: A. Market value B. Current costs C. Capabilities of the old asset D. Opportunity costsarrow_forwardQUESTION 17 1. Which property level costs are included "Above the Line"? C a. Depreciation C b. Capital reserves c. Both depreciation & capital reserves d. General & Administrativearrow_forward
- EXERCISE 11–1 Indicate whether the items below are to be capitalized as an intangible asset or expensed. Which account(s) would each item be recorded to? Salaries of research staff Costs to test prototypes Borrowing costs for development of a qualifying intangible asset Executive salaries for time spent on development of an intangible asset Costs to launch a new product Purchase cost of a patent from a third party Product research costs Costs internally incurred to create goodwill Legal costs to successfully defend a patent Purchase price of new software Training costs for new software Direct costs of special programming needed when purchasing new software Costs incurred in forming a corporation for purposes of commercializing a new product Operating losses incurred in the start-up of a business to manufacture a patented produce The purchase cost of a franchise The cost of developing a patent The cost of purchasing a patent from an inventor Legal costs incurred in securing a patent…arrow_forwardChapter 8 Why are the costs of plant/long term assets recovered through depreciation vs. expensed out during the period purchased? Choose one of the following depreciation methods to discuss: straight line, units of production, declining balance. Share how depreciation using this method is calculated and provide an example of when this would be the most ideal method for application.arrow_forward36 Depreciation is the systematic allocation of the cost price of an item of property, plant and equipment over the useful life of that asset. A. True B. Falsearrow_forward
- QS 10-2 Assigning costs to plant assets C1 O Listed below are costs (or discounts) to purchase or construct new plant assets. (1) Indicate whether the costs should be expensed or capitalized (meaning they are included in the cost of the plant assets on the balance sheet). (2) For costs that should be capitalized, indicate in which category of plant assets (Equipment, Building, or Land) the related costs should be recorded on the balance sheet. Expensed or Capitalized Asset Category 1. Wages paid to train employees to use new equipment. 2. Invoice cost paid for new equipment. 3. Early payment discount taken on the purchase of new equipment. 4. Realtor commissions incurred on land purchased. 5. Property taxes on land incurred after it was purchased. 6. Costs of oil for the truck used to deliver new equipment. 7. Costs to lay foundation for a new building. 8. Insurance on a new building during its construction.arrow_forwardquestion 23 choose the correct answer from the choicesarrow_forwardQuestion 10 Depreciation is: Oa. the loss in market value of an asset. Ob. the allocation of a long-term asset's cost to an expense account over the asset's life. OC. an increase in an asset's value over time or usage. d. none of the above. A Click Submit to complete this assessment.arrow_forward
- 32 Which of the following information is necessary to apply the straight-line method of depreciation for an asset? A. Initial cost, useful life of asset and residual value. B. Useful life of asset and residual value. C. Initial cost and useful life of an asset. D. Residual value and initial costarrow_forwardQUESTION 10 Which of the following statements is false regarding intangible assets? O a. Intangibles with an indefinite life are not subject to amortization. O b.Purchased intangibles are recorded as assets for the amount paid to acquire them. O c. Internally developed intangibles should be recorded as assets for the amount spent to develop them. O d. Intangibles with a finite life should be amortized on a straight-line basis.arrow_forwardquestion 11 choose the correct answer from the choicesarrow_forward
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