Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 9, Problem 7MC
ACME. Inc., uses straight-line
- a. Loss of $2,500
- b. Gain of $3,500
- c. Loss of $1,500
- d. Gain of $1,500
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Sparkling Company uses IFRS. After 3 full years of use, the Sparkling Company revalues equipment with a carrying value of $990,000 to its fair value of $1,800,000 using the accumulated depreciation elimination method. The original cost of the equipment is $1,700,000 and the equipment has a useful life of 10 years with no scrap value. Sparkling Company depreciates under the straight-line method. How much is the revaluation gain or loss? Where does Sparkling Company report any unrealized gain or loss from the revaluation in the financial statements?
Group of answer choices
$810,000 unrealized gain in revaluation surplus reported in other comprehensive income in statement of comprehensive income
$810,000 unrealized gain in continuing operations of statement of comprehensive income
$710,000 recovery of unrealized loss reported in other comprehensive income in statement of comprehensive income
DEPRECIATIONA machine purchased by the Hubalol Company originally cost $245,000.Delivery and installation charges amounted to $5000. The declared salvagevalue was $25,000; useful life of the machine was 12 years. At the end of Year4, the company changed its product mix and found that it no longer needed themachine. One of its competitors agreed to buy the machine for $90,000.Compute the book value of the machine at end of Year 4 and determine theloss or gain of depreciation on the sale using:a. Straight-Line Method
b. Sinking fund at 8%
Augie Corporation purchased a truck at a cost of $64,800. It has an estimated useful life of five years and estimated residual value of $5,800. At the beginning of
year three, Augie's managers concluded that the total useful life would be four years, rather than five years. There was no change in the estimated residual value.
What is the amount of depreciation that Augie should record for year 3 under the straight-line depreciation method?
Multiple Choice
O
O
O
$11,800.
$16,700.
$17,700.
$8,850.
Chapter 9 Solutions
Fundamentals of Financial Accounting
Ch. 9 - Define long-lived assets. What are the two common...Ch. 9 - Under the cost principle, what amounts should be...Ch. 9 - What is the term for recording costs as assets...Ch. 9 - 4. Waste Management, Inc., regularly incurs costs...Ch. 9 - Distinguish between ordinary repairs and...Ch. 9 - Describe the relationship between the expense...Ch. 9 - Why are different depreciation methods allowed?Ch. 9 - In computing depreciation, three values must be...Ch. 9 - Prob. 9QCh. 9 - After merging with Northwest Airlines, Delta...
Ch. 9 - A local politician claimed, to reduce the...Ch. 9 - What is an asset impairment? How is it accounted...Ch. 9 - What is book value? When equipment is sold for...Ch. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - FedEx Corporation reports the cost of its aircraft...Ch. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - (Supplement 9A) How does depletion affect the...Ch. 9 - (Supplement 9B) Over what period should an...Ch. 9 - Prob. 1MCCh. 9 - Prob. 2MCCh. 9 - Prob. 3MCCh. 9 - A company wishes to report the highest earnings...Ch. 9 - Barber, Inc., depreciates its building on a...Ch. 9 - Thornton Industries purchased a machine on July 1...Ch. 9 - ACME. Inc., uses straight-line depreciation for...Ch. 9 - What assets should be amortized using the...Ch. 9 - Prob. 9MCCh. 9 - The Simon Company and the Allen Company each...Ch. 9 - Classifying Long-Lived Assets and Related Cost...Ch. 9 - Prob. 9.2MECh. 9 - Prob. 9.3MECh. 9 - Computing Book Value (Straight-Line Depreciation)...Ch. 9 - Computing Book Value (Units-of-Production...Ch. 9 - Computing Book Value (Double-Declining-Balance...Ch. 9 - Calculating Partial-Year Depreciation Calculate...Ch. 9 - Prob. 9.8MECh. 9 - Recording the Disposal of a Long-Lived Asset...Ch. 9 - Reporting and Recording the Disposal of a...Ch. 9 - Prob. 9.11MECh. 9 - Prob. 9.12MECh. 9 - Computing and Evaluating the Fixed Asset Turnover...Ch. 9 - (Supplement 9A) Recording Depletion for a Natural...Ch. 9 - Prob. 9.15MECh. 9 - Prob. 9.1ECh. 9 - Prob. 9.2ECh. 9 - Determining Financial Statement Effects of an...Ch. 9 - Prob. 9.4ECh. 9 - Prob. 9.5ECh. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Prob. 9.8ECh. 9 - Demonstrating the Effect of Book Value on...Ch. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Computing Depreciation and Book Value for Two...Ch. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Prob. 9.2CPCh. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Prob. 9.3PACh. 9 - Prob. 9.4PACh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Prob. 9.4PBCh. 9 - Accounting for Operating Activities (Including...Ch. 9 - Prob. 9.1SDCCh. 9 - Prob. 9.2SDCCh. 9 - Ethical Decision Making: A Mini-Case Assume you...Ch. 9 - Critical Thinking: Analyzing the Effects of...Ch. 9 - Prob. 9.7SDCCh. 9 - Accounting for the Use and Disposal of Long-Lived...
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