INTERMEDIATE ACCOUNTING ACCESS 540 DAY
10th Edition
ISBN: 9781264706327
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 11, Problem 11.3DMP
Judgment Case 11–3
Straight-line method; composite depreciation
• LO11–1, LO11–2
Portland Co. uses the straight-line depreciation method for depreciable assets. All assets are
Required:
1. What factors should have influenced Portland’s selection of the straight-line depreciation method?
2. a. What benefits should derive from using the composite method rather than the individual basis for manufacturing machinery?
b. How should Portland have calculated the manufacturing machinery’s annual depreciation in its first year of operation?
(AICPA adapted)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
4G+
12:47 PM
0.4KB/s ill
68
וח
01:14:08 Remaining
Multiple Choice
Which statement is incorrect with
respect to depreciation?
Depreciation is not recognized if the fair value
of an asset exceeds carrying amount.
Depreciation ceases at the earlier between
the date the asset is classified as held for
sale and the date the asset is derecognized.
The depreciation method shall reflect the
pattern in which the asset's economic
benefits are consumed by the entity.
Depreciation of an asset begins when it is
available for use or when it is in the location
and condition necessary for the intended use.
45 of 75
Ex 17.6 The Gloaming company incurred the following costs during a period in relation to a specific area of interest and wants to capitalise its E & E costs on an area of interest method.The following costs were incurred:Cash paid to acquire seismic study from government(GST exempt) 3,000Cash paid to acquire exploration rights(GST exempt) 10,000Cash paid to acquire fencing materials for an area-of-interest, including GST of $80 880Contractor fees for labour to set up the fencing, including GST of $50550Contractor fees for exploratory drilling, including GST $2,50027,500Hire of drilling equipment for contractor use, including GST of $5005,500Salary of project manager 60,000Stationery and other office supplies, including GST $30 330Gloaming company non executive directors fees paid 160,000Required:Which of the above costs can be capitalised as E& E assets?
34a
34 -
Which of the following statements about depreciation is false?
a)
The asset to be depreciated should be among the assets of the enterprise.
B)
Proportional depreciation method can be applied for all tangible fixed assets.
NS)
For a property, plant and equipment to be depreciated, its economic life must be more than one year.
D)
As a result of use, wear, tear, depreciation or obsolescence must be experienced in the tangible asset.
TO)
Depreciation is a type of expense that does not require a cash outflow.
Chapter 11 Solutions
INTERMEDIATE ACCOUNTING ACCESS 540 DAY
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 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.8BECh. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.18BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.20BECh. 11 - Prob. 11.21BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Prob. 11.10ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Prob. 11.26ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.35ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.12PCh. 11 - Prob. 11.14PCh. 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. 11.4DMPCh. 11 - Prob. 11.8DMPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Prob. 11.11DMPCh. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16DMPCh. 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
- Question 34arrow_forwardEXERCISE 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_forwardQuestion 87 Which type of value loss is attributed to causes lying within the property? (A) Functional obsolescence B External obsolescence Economic obsolescence D) None of the abovearrow_forward
- stion 9 Which statement below is TRUE of the straight-line method of depreciation? a. It is a method that will provide higher amounts of depreciation expense in the early years of an asset's life and smaller amounts in the later years. Ob. It is a method that results in unequal amounts of depreciation expense each year. Oc. It is a method that is based upon the actual amounts of an asset used up each year, such as the number of miles a truck is driven. d. It is a method that results in equal amounts of depreciation expense each year. MacBook Pro & @ # $ 8 2 3 4 W E R Q J K G H F S D A Barrow_forward4G+ 12:43 PM 12.6KB/s © l 61 00:17:22 Remaining Multiple Choice The cost of intangible asset acquired by way of government grant is recorded at Fair value Nominal amount plus directly attributable costs Fair value or nominal amount plus directly attributable costs, whichever is lower Fair value or nominal amount plus directly attributable costs, representing an accounting policy choice by the entity 7 of 25 レarrow_forwardQuestion 6 Which depreciation method results larger depreciation expense in the early years of an asset's life and smaller depreciation expense in the later years: O A. Only Double Declining Balance method. O B. Only Straight-Line method. O C. Both Units-of-Production method and Double Declining Balance method. O D. Only Units-of-Production method.arrow_forward
- 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 assetarrow_forward11 1. Is it necessary for a business to use the same method of computing depreciation for all classes of its depreciable assets? 2. Under what conditions is the use of the straight-line depreciation method most appropriate? 3. Under what condítions is the use of the units-of-activity depreciation method most appropriate? 4. Under what conditions is the use of the double- declining-balance depreciation method most appropriate? To receive full credit you must answer all questions by the Sept 1st. You must respond to another student's post by Sept 8th. Please follow the Discussion Post Guidelines in your Syllabus. 1. Does a discounted note payable provide credit without * interest? Discuss. Properties of various discussions 31 MacBook Airarrow_forward4G+ 12:52 PM 12.4KB/s l 68 וח 01:09:39 Remaining Multiple Choice Which of the following factors is NOT considered in determining the useful life of an intangible asset? Expected actions of competitors Expected usage of the asset Legal or contractual provisions O Initial cost 50 of 75 IIarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
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