INTERMEDIATE ACCOUNTING 2: COMPUTATIONAL

During 20x6, Belardo Corporation constructed and certain assets, and incurred the following interest costs in connection with those activities:

 

All of these assets required an extended period of time for completion. Assuming the effect of interest capitalization material, what is the total amount of interest costs to be capitalized?

A company made the following cash expenditures on a self-constructed building begun January 1 of the current year:

 

January 1                     P 50,000

June 1                          P 60,000

December 1                 P 90,000

 

The building is still under construction at year-end. What is the average accumulated expenditures for the purpose of capitalizing interest?

Peyton Company started construction of a new office building on January 1, 20x1, and moved into the finished building on July 1, 20x2. Of the building's P5,000,000 total cost, P4,000,000 was incurred in 20x1 evenly throughout the year. Peyton’s incremental borrowing rate was 12 percent throughout 20x1, and the total amount of interest incurred by Peyton during 20x1 was P204,000. What amount should Peyton report a capitalized interest at December 31, 2001?

The following information pertains to Madagascar Co.

How much is classified as biological assets that are accounted for under PAS 41 Agriculture?

A herd of 5 four year old animals was held on 1 January 2007. On 1 July 2007 a 4 1/2 year old animal was purchased. The fair values less costs to sell were as follows:

 

How much is the gain to be recognized from the change in fair value less costs to sell in 2007?

ABC Co. Has three, 1-year old, animals with amount total carrying of P3,000 on January 1, 20x1. On March 31, ABC Co. Acquired two animals, aged 2.25 years old each, for P2,000 each, the fair value less costs of the animals on this date. Six animals were born on October 1, 20x1. The fair value less costs to sell of a new born animal on this date is P500. ABC Co. Determined the following fair values less costs to sell on December 31, 20x1:

 

How much is the total gain (loss) from the change in FVLCS during the period?

 

West, Inc. Made the following expenditures relating to Product Y:

 

 

 

 

What is the total amount of costs that will be expensed when incurred?

Brill Co. Made the following expenditures during 20x3:

 

What amount of these expenditures should Brill report in its 20×3 income statement as research and development expenses?

During 20x3, Pitt Corp. Incurred costs to develop and produce a routine, low-risk computer software product, as follows:

In Pitt's December 31, 20x3 balance sheet, what amount should be reported in inventory?

 

The general ledger of the Flayle Corporation as of December 31 includes the following accounts:

 

In the preparation of Flayle's balance sheet as of December 31, what should be reported as total intangible assets to be accounted for under PAS 38 Intangible assets?

During December 20x3, Toni Corp. Determined that there had been a significant decrease in the value of its equipment used in its roofing business. At December 31, 20x3, Toni compiled the information below:

 

What is the amount of the impairment loss that should be reported on Toni's income statement prepared for the year ended December 31, 20x3?

Scarborough Company had purchased equipment for P280,000 on January 1, 20x0. The equipment had an eight-year useful life and a residual value of P40,000. Scarborough depreciated the equipment using the straight-line method. In August 20x3. Scarborough questioned the recoverability of the carrying amount of this equipment. At August 31, 20x3, the present value of expected net future cash inflows related to the continued use and eventual disposal of the equipment total P175,000. The equipment's fair value less costs of disposal on August 31, 20x3, is P150,000. After any loss on impairment has been recognized, what is the carrying amount of Scarborough’s equipment as of August 31, 20x3?

During December 20x3, Bubba Inc. Determined that there had been a significant decrease in the value of its equipment used in its manufacturing process. At December 31, 20x3, Bubba compiled the information below.

 

What is the amount of impairment loss that should be reported on Bubba's income statement prepared for the year ended December 31, 20x3?

Marjorie, In. Acquired a machine for P400,000 on August 31, 20x0. The machine has a five-year life, a P50,000 residual value, and was depreciated using the straight-line method. On May 31, 20x3, a test for recoverability reveals that the present value of expected net future cash inflows related to the continued use and eventual disposal of the machine total P150,000. The machine's fair value less costs of disposal on May 31, 20x3, is P135,000, with no residual value. Assuming a loss on impairment is recognized on May 31, 20x3, what is Marjorie's depreciation expense for June 20×3?

A company operates a mine in a country where legislation requires that the owner must restore the site on completion of its mining operations. The cost of restoration includes the replacement of the overburden, which must be removed before mining operations commence. A provision for the costs to replace the overburden was recognized as soon as the overburden was removed. The amount provided was recognized as part of the cost of the mine and is being depreciated over the mine's useful life. The carrying amount of the provision for restoration costs is P500,000, which is equal to the present value of the restoration costs.

The entity is testing the mine for impairment. The cash-generating unit for the mine is the mine asa whole, Theo has received various offers to buy the mine at a pice of around P800,000. The price reflects the fact that the buyer will assume the obligation to restore the overburden. Disposal costs for the mine are negligible. The value in use of the mine is approximately P1,200,000, excluding restoration costs. The carrying amount of the mine is P1,600,000.

How much is the impairment loss?

On January 1, 20x1 Step Company owns a machine with a carrying amount of P2,400,000. The machine was purchased four years earlier for P4,000,000. Step uses the straight-line method of depreciation. During December 20x1, Step determined that the machine suffered permanent impairment of its operational value and will not be economically useful in its production process after December 31, 20x1. Step Co. Sold the machine for P650,000, net of disposal cost, on January 5, 20×2. The 20x1 financial statements of Step Co. Were authorized for issuance on March 31, 20x2. In its profit or loss for the year ended December 31, 20x1, Step should recognize a loss of

Happy Company is involved in the generation and distribution of electricity. Management is reviewing all of its assets for impairment as a result of a fall in the market price of electricity. One of Happy Company's power station is 5 years old and has a carrying amount of P5,000,000 and value in use of P4,400,000,considering the revised electricity price. A similar asset was recently sold to a German-based global power utility for P5,200,000. The estimated incremental costs that would be directly attributable to the disposal are P100,000. The rate used in the computation of the value in use was 15%.

 

The amount of impairment loss to be recognized by Happy Company is