Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 2, Problem 10MC
To determine
Identify the option that is set an example for the expense recognition principle.
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An asset, with a useful life of 10 years, wasacquired at the beginning of year 1 at a cost of $60 000. The asset
is revalued at the beginning ofyear 4 in terms of the entitys revaluation policyto gross replacement cost of $
80 000 at this date.Assume that depreciation calculated foraccounting purposes on the straight-line
methodaccurately reflects economic obsolescence. What is the revaluation amount?
Hardy Man, Inc., acquired a machine in 2021 for P 400,000 and erroneously charged
the cost to an expense account. Correct accounting treatment would have called for
the depreciation of the asset over its estimated useful life of five years with a 10%
salvage value by the straight-line method. Hardy Man's policy is to take one-half
year's depreciation in the year of acquisition and one-half in the year of disposal.
QUESTION:
What is the impact of the error in 2022 net income?
Hardy Man, Inc., acquired a machine in 2021 for P 400,000 and erroneously charged the cost to an expense account. Correct accounting treatment would have called for the depreciation of the asset over its estimated useful life of five years with a 10% salvage value by the straight-line method. Hardy Man's policy is to take one half year's depreciation in the year of acquisition and one-half in the year of disposal.
QUESTION:
What is the impact of the error in 2022 net income?
Chapter 2 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 2 - Prob. 1GICh. 2 - Prob. 2GICh. 2 - How do accounting concepts, principles, standards,...Ch. 2 - Prob. 4GICh. 2 - Prob. 5GICh. 2 - Prob. 6GICh. 2 - What is the Objective: Useful Information about...Ch. 2 - Prob. 8GICh. 2 - Prob. 9GICh. 2 - Define (a) return on investment, (b) risk, (c)...
Ch. 2 - Prob. 11GICh. 2 - Prob. 12GICh. 2 - Prob. 13GICh. 2 - Prob. 14GICh. 2 - Prob. 15GICh. 2 - Prob. 16GICh. 2 - What is the cost constraint, and how does it...Ch. 2 - Prob. 18GICh. 2 - Prob. 19GICh. 2 - Prob. 20GICh. 2 - Prob. 21GICh. 2 - Prob. 22GICh. 2 - Prob. 23GICh. 2 - Describe accrual accounting. What are the...Ch. 2 - What drives the timing of revenue recognition?...Ch. 2 - Prob. 26GICh. 2 - Prob. 27GICh. 2 - Prob. 28GICh. 2 - Prob. 29GICh. 2 - The information provided by financial reporting...Ch. 2 - Which of the following is considered a constraint...Ch. 2 - According to Statement of Financial Accounting...Ch. 2 - Prob. 4MCCh. 2 - Prob. 5MCCh. 2 - Prob. 6MCCh. 2 - Accruing net losses on obsolete inventory is an...Ch. 2 - Prob. 8MCCh. 2 - An accrued expense is an expense: a. incurred but...Ch. 2 - Prob. 10MCCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Prob. 1CCh. 2 - Prob. 2CCh. 2 - Prob. 3CCh. 2 - Prob. 4CCh. 2 - An accountant must be familiar with the concepts...Ch. 2 - Prob. 6CCh. 2 - Prob. 7CCh. 2 - Prob. 8CCh. 2 - Prob. 9CCh. 2 - Accruals and Deferrals Generally accepted...Ch. 2 - Prob. 11CCh. 2 - Prob. 12CCh. 2 - You have been hired as an accounting consultant by...Ch. 2 - Prob. 14C
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