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TEST BANK for Accounting Principles, Volume 2, 9th Canadian Edition by Jerry J. Weygandt, Donald E. Kieso and Paul D. Kimmel ISBN-. All Chapter 9-18 Solutions. 1209 Pages.$34.48
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TEST BANK for Accounting Principles, Volume 2, 9th Canadian Edition by Jerry J. Weygandt, Donald E. Kieso and Paul D. Kimmel ISBN-. All Chapter 9-18 Solutions. 1209 Pages.
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Accounting Principles, Volume 2, 9th Canadian
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Accounting Principles, Volume 2, 9th Canadian
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Accounting Principles, Volume 2
TEST BANK for Accounting Principles, Volume 2, 9th Canadian Edition by Jerry J. Weygandt, Donald E. Kieso and Paul D. Kimmel ISBN-13 978-4. All Chapter 9-18 Solutions. 1209 Pages. TABLE OF CONTENTS Volume 2 9 Long-Lived Assets 10 Current Liabilities and Payroll 11 Financial Reporting Concepts ...
donald e kieso and paul d kimmel isbn 13 978 1119786634 all chapter 9 18 solutions 1209 pages
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,Test Bank for Accounting Principles, Ninth Canadian Edition
3. Explain the factors that cause changes in periodic depreciation and calculate revised
depreciation for property, plant, and equipment. A revision to depreciation will be required if there
are (a) capital expenditures during the asset’s useful life; (b) impairments in the asset’s fair value; (c)
changes in the asset’s fair value when using the revaluation model; and/or (d) changes in the
appropriate depreciation method, estimated useful life, or residual value. An impairment loss must be
recorded if the recoverable amount is less than the carrying amount. Revisions of periodic
depreciation are made in present and future periods, not retroactively. The new annual depreciation
is determined by using the depreciable amount (carrying amount less the revised residual value), and
the remaining useful life, at the time of the revision.
4. Demonstrate how to account for property, plant, and equipment disposals. The accounting for
the disposal of a piece of property, plant, or equipment through retirement or sale is as follows:
(a) Update any unrecorded depreciation for partial periods since depreciation was last recorded.
(b) Calculate the carrying amount (cost – accumulated depreciation).
(c) Calculate any gain (proceeds > carrying amount) or loss (proceeds < carrying amount) on disposal.
(d) Remove the asset and accumulated depreciation accounts at the date of disposal. Record the
proceeds received and the gain or loss, if any.
An exchange of assets is recorded as the purchase of a new asset and the sale of an old asset. The new
asset is recorded at the fair value of the asset given up plus any cash paid (or less any cash received).
The fair value of the asset given up is compared with its carrying amount to calculate the gain or loss.
If the fair value of the new asset or the asset given up cannot be determined, the new long-lived asset
is recorded at the carrying amount of the old asset that was given up, plus any cash paid (or less any
cash received).
5. Record natural resource transactions and calculate depletion. The units-of-production method of
depreciation is generally used for natural resources. The depreciable amount per unit is calculated by
dividing the total depreciable amount by the number of units estimated to be in the resource. The
depreciable amount per unit is multiplied by the number of units that have been extracted to
determine the annual depletion. The depletion and any other costs to extract the resource are
recorded as inventory until the resource is sold. At that time, the costs are transferred to cost of
resource sold on the income statement. Revisions to depletion will be required for capital
expenditures during the asset’s useful life, for impairments, and for changes in the total estimated
units of the resource.
6. Identify the basic accounting issues for intangible assets and goodwill. The accounting for
tangible and intangible assets is much the same. Intangible assets are reported at cost, which includes
all expenditures necessary to prepare the asset for its intended use. An intangible asset with a finite
life is amortized over the shorter of its useful life and legal life, usually on a straight-line basis. The
extent of the annual impairment tests depends on whether IFRS or ASPE is followed and whether the
intangible asset had a finite or indefinite life. Intangible assets with indefinite lives and goodwill are
not amortized and are tested at least annually for impairment. Impairment losses on goodwill are
never reversed under both IFRS and ASPE.
, Test Bank for Accounting Principles, Ninth Canadian Edition
7. Illustrate the reporting and analysis of long-lived assets. It is common for property, plant, and
equipment, and natural resources to be combined in financial statements under the heading
“property, plant, and equipment.” Intangible assets with finite and indefinite lives are sometimes
combined under the heading “intangible assets” or are listed separately. Goodwill must be presented
separately. Either on the balance sheet or in the notes, the cost of the major classes of long-lived
assets is presented. Accumulated depreciation (if the asset is depreciable) and carrying amount must
be disclosed either on the balance sheet or in the notes. The depreciation and amortization methods
and rates, as well as the annual depreciation expense, must also be indicated. The company’s
impairment policy and any impairment losses should be described and reported. Under IFRS,
companies must include a reconciliation of the carrying amount at the beginning and end of the
period for each class of long-lived assets and state whether the cost or revaluation model is used.
The asset turnover ratio (net sales ÷ average total assets) is one measure that is used by companies to
show how efficiently they are using their assets to generate sales revenue. A second ratio, return on
assets (profit ÷ average total assets), calculates how profitable the company is in terms of using its
assets to generate profit.
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