FINANCIAL ACCOUNTING 9TH
16th Edition
ISBN: 9781308821672
Author: Libby
Publisher: MCG/CREATE
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Chapter 8, Problem 8.15E
1.
To determine
Reconstruct the
2.
To determine
Compute the amount of property and equipment that Company U wrote off as impaired during the year.
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In a recent 10-K report, United Presents Service states it “is the world’s largest package delivery company, a leader in the U.S. less-than-truckload industry, and the premier provider of global supply chain management solutions.” The following note and data were reported:
NOTE 1—SUMMARY OF ACCOUNTING POLICIES
Property, Plant and Equipment
We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate.
Dollars in Millions
Cost of property and equipment (beginning of year)
$ 54,728
Cost of property and equipment (end of year)
59,787
Capital expenditures during the year
6,580
Accumulated depreciation (beginning of year)
28,072…
In a recent 10-K report, United Presents Service states it “is the world’s largest package delivery company, a leader in the U.S. less-than-truckload industry, and the premier provider of global supply chain management solutions.” The following note and data were reported:
NOTE 1—SUMMARY OF ACCOUNTING POLICIES
Property, Plant and Equipment
We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate.
Dollars in Millions
Cost of property and equipment (beginning of year)
$ 54,524
Cost of property and equipment (end of year)
59,736
Capital expenditures during the year
6,410
Accumulated depreciation (beginning of year)
27,936…
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Chapter 8 Solutions
FINANCIAL ACCOUNTING 9TH
Ch. 8 - Define long-lived assets. Why are they considered...Ch. 8 - Prob. 2QCh. 8 - What are the classifications of long-lived assets?...Ch. 8 - Prob. 4QCh. 8 - Describe the relationship between the expense...Ch. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - In computing depreciation, three values must be...Ch. 8 - The estimated useful life and residual value of a...Ch. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Why is depreciation expense added to net income...Ch. 8 - Miga Company and Porter Company both bought a new...Ch. 8 - Leslie, Inc.. followed the practice of...Ch. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - (Chapter Supplement) Irish Industries purchased a...Ch. 8 - Prob. 8.1MECh. 8 - Prob. 8.2MECh. 8 - Prob. 8.3MECh. 8 - Prob. 8.4MECh. 8 - Computing Book Value (Double-Declining-Balance...Ch. 8 - Computing Book Value (Units-of-Production...Ch. 8 - Identifying Asset Impairment LO8-4 For each of the...Ch. 8 - Prob. 8.8MECh. 8 - Prob. 8.9MECh. 8 - Prob. 8.10MECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Computing and Recording Cost and Depreciation of...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Determining Financial Statement Effects of an...Ch. 8 - Recording Depreciation and Repairs (Straight-Line...Ch. 8 - Prob. 8.7ECh. 8 - Prob. 8.8ECh. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Computing Depreciation under Alternative Methods...Ch. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Computing Depreciation and Book Value for Two...Ch. 8 - Prob. 8.15ECh. 8 - Recording the Disposal of an Asset at Three...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.22ECh. 8 - (Chapter Supplement) Recording a Change in...Ch. 8 - Prob. 8.24ECh. 8 - Prob. 8.25ECh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Analyzing the Effects of Repairs, an Addition, and...Ch. 8 - Prob. 8.3PCh. 8 - Best Buy Co., Inc., headquartered in Richfield,...Ch. 8 - Evaluating the Effect of Alternative Depreciation...Ch. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Computing Goodwill from the Purchase of a Business...Ch. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Explaining the Nature of a Long-Lived Asset and...Ch. 8 - Prob. 8.2APCh. 8 - Computing the Acquisition Cost and Recording...Ch. 8 - Prob. 8.4APCh. 8 - Recording and Interpreting the Disposal of Three...Ch. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Asset Acquisition, Depreciation, and Disposal Pool...Ch. 8 - Case A. Dr Pepper Snapple Croup, Inc., is a...Ch. 8 - Prob. 8.1BCOMPCh. 8 - Prob. 8.1CCOMPCh. 8 - Case D. Stewart Company reports the following...Ch. 8 - Case E. Matson Company purchased the following on...Ch. 8 - Prob. 8.1CPCh. 8 - Finding Financial Information LO8-1, 8-2, 8-6...Ch. 8 - Comparing Companies within an Industry Refer to...Ch. 8 - Prob. 8.4CPCh. 8 - Prob. 8.5CPCh. 8 - Prob. 8.6CPCh. 8 - Evaluating the Impact of Capitalized Interest on...
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- Saved Help Sav In a recent 10-K report, Speedy Delivery Service states it “is the world's largest package delivery company, a leader in the U.S. less- than-truckload industry, and the premier provider of global supply chain management solutions." The following note and data were reported: Note 1-Summary of Accounting Policies Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation…arrow_forwardHw would you best define an intangible asset? A. Assets that dont impact the company's valuation B. Assets with physical traits, such as property or equipment C. Assets not recorded on the Balance Sheet, such as customer loyyalty or intellectual property D. Assets that were added to the company in the most recent annual report E. Assets that depreciate at an accelerated ratearrow_forwardIn the case study of Company XYZ's challenges in accounting for goodwill and intangible assets impairment, which factor poses a risk to the value of intangible assets such as patents and software? A) Technological advancements B) Annual amortization C) Lack of impairment testing D) Economic stabilityarrow_forward
- 1. What are the two main characteristics of intangible assets? 2. Why does the accounting profession make a distinction between internally created intangibles and purchased intangibles? 3. What are the factors to be considered in estimating the useful life of an intangible asset? 4. What is the nature of research and development cost? 5. Indicate the proper accounting form the following items. Organization Cost Advertising Cost Operating Lossesarrow_forwardPlease do not give image formatarrow_forwardCritical Analysis of the Annual Report for National Grid plc Utilities and dicuss the accounting policies and principles adopted by the company regarding intangible assets (IAS 38).arrow_forward
- Which of the following would have an effect on the presentation of past years' comparable financial statements? Select one: O a. A component operation of the company is discontinued O b. Revising the estimated life of equipment Oc Correcting an error due to improper revenue recognition O d. Impairment of Goodwill Oe. Using MACRS to compute the depreciation of an asset for tax purposesarrow_forwardDomesticarrow_forwardQuestion #5 b. What is the difference between User Specific Qualities and Primary Qualitative Characteristics? c. If I want to book one month depreciation of $270.12 for an asset, what is the journal entry? d. List the four importance of accounting standards. e. Please give the three things considered and posted when disposing of a fixed asset.arrow_forward
- pls answer thanks.arrow_forwardPlease Introduction and show work and please no plagiarism pleasearrow_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
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