Exercise 4-5 (Part Level Submission) Acadia Inc. owns the following long-lived assets: Asset Vehicles Equipment Date Purchased Cost Jan. 1, 2017 $33,000 July 1, 2018 12,000 Estimated Useful Life 3 years 5 years
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- Determining Carrying Value and Amortization of Intangible Assets Review the following information pertaining to Denzel Company. 1. A patent was purchased on January 2 of Year 1 for $104,000 when the remaining legal life was 16 years. On January 2 of Year 3, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition. 2. On January 1 of Year 3, Denzel Company purchased a second patent for $128,000 cash. At January 1 of Year 3, a total of 6 years of the patent's legal life of 20 years had expired. 3. On June 30 of Year 3, Denzel Company paid a firm $12,800 for a new trademark. Denzel considers the life of the trademark to be indefinite. 4. On November 1 of Year 3, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $192,000. Denzel determined that the fair value of the identifiable net assets acquired in the transaction is $187,200. Required a. What is the carrying value…Computing Impairment of Intangible Assets Stiller Company had the following information for its three intangible assets. 1. Patent: A patent was purchased for $180,000 on June 30, 2018. Stiller estimated the useful life of the patent to be 15 years. On December 31, 2020, the estimated future cash flows attributed to the patent were $153,000. The fair value of the patent was $135,000. 2. Trademark: A trademark was purchased for $9,000 on August 31, 2019. The trademark is considered to have an indefinite life. The fair value of the trademark on December 31, 2020, is $4,500. 3. Goodwill: Stiller recorded goodwill in January 2019, related to a purchase of another company. The carrying value of goodwill is $54,000 on December 31, 2020. On December 31, 2020, the segment for which the goodwill relates had a fair value of $1,044,000. The book value of the net assets of the segment (including goodwill) is $1,080,000. Note: Round each of your answers to the nearest whole dollar. a. Classify each…EXERCISES E11-1 (L01) EXCEL (Depreciation Computations—SL, SYD, DDB) Deluxe Ezra Company purchases equipment on Janu- ary 1, Year 1, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000. Instructions (a) Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (b) Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years’-digits method. (c) Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (In performing your calculatio
- D. AMORTIZATION OF INTANGIBLE ASSETS Harper Company, established in 2019, has the following transactions related to intangible assets. Date Transactions 1 Feb-19 Purchased patent (7-year useful life) $840,000 1 Apr-19 Goodwill purchased (indefinite useful life) $510,000 Instructions Prepare the necessary entries to record these intangibles. All costs incurred were for cash. b. Make the adjusting entries for any necessary amortization as of December 31, 2019. a.Red Velvet Services has the following assets as of December 31, 2017 Date Acquired 4. Salvage Value P1,500,000 Useful Life Cost P16,000,000 10 years 5 years Building Jan. 1, 2015 50,000 July 1, 2016 March 1, 2017 7,000,000 1,900,000 Furniture & Fixtures Equipment 8 years 100,000 Required: Cive the adjusting en tOTecord utpretiatioITTOr each asset in 2015, 2010, dnu 2017 Give the depreciation expense of each asset TOI Cach year Oive the d. Give the entry on March 1, 2018 when the equipment was sold for P500,000 b. tien of each accot foreach voar C.Presented below is information related to equipment owned by Camel Company Q3- at December 31, 2021. Cost Accumulated depreciation to date Value-in-use Fair value less cost of disposal BD6,000,000 900,000 4,000,000 3,200,000 Assume that Camel company will continue to use this asset in the future. As of December 31, 2021, the equipment has a remaining useful life of 5 years. Required: Based on the above data use your advance skills to; a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2021. b. Prepare the journal entry to record depreciation expense for 2022. C. The recoverable amount of the equipment at December 31, 2022, is BD4,250,000. Prepare the journal entry (if any) necessary to record this increase.
- AA insert Construction Bhd just purchased some fixed assets that are classified as 5-year property for their asset. The proposed assets cost RM14,200, its installation costs RM700 and its shipping cost RM 320. What is the amount of the depreciation expense using the straight-line method (SLM)?Presented below is information related to equipment owned by Oriole SpA at December 31, 2022. Cost Accumulated depreciation to date Value-in-use Fair value less cost of disposal (a) €10,620,000 Oriole intends to dispose of the equipment in the coming year. As of December 31, 2022, the equipment has a remaining useful life of 4 years. Date 1,180,000 Dec. 31 8,260,000 5,192,000 Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2022. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit CreditRequired information Problem 8-1A (Algo) Plant asset costs; depreciation methods LO C1, P1 [The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $497,250; land, $292,500; land improvements, $68,250; and four vehicles, $117,000. Problem 8-1A (Algo) Part 4 es 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life? Is tax payment less under accelerated depreciation? Yes No
- P10.5A Journalise a series of equipment transactions related to purchase, sale, retirement, and depreciation At December 31, 2021. Grand Regency Limited reported the following as Non-current tangible assets: 4,000,000 16,400,000 June 11 July 1 Dec. 31 Land Buildings Less: Accumulated depreciation - buildings Equipment Less: Accumulated depreciation - equipment Total plant assets During 2022, the following selected cash transactions occurred. April 1 Purchased land for R2,130,000. May 1 (b) (c) (d) 28,500,000 12,100,000 48,000,000 5,000,000 Required: (a) 43,000,000 £63,400,000 Sold equipment that cost R750,000 when purchased on January 1, 2018. The equipment was sold for R450,000. Sold land purchased on June 1, 2012 for R1,500,000. The land cost R400,000. Purchased equipment for R2,500,000. Retired equipment that cost R500,000 when purchased on December 31, 2012. No salvage value was received. Prepare general journal entries the above transactions. The company uses straight-line…Problem 5:On January 1, 2016, Greenhills Company acquired property, plant and equipment for each as follows:Cost Life in yearsLand 5,000,000Building 25,000,000 2513Machinery 10,000,000 5Equipment 3,000,000 10At the beginning of 2019, a revaluation of property items was made by professionally qualified valuers.While no change in the life of the assets was indicated, it was ascertained that replacement cost of theassets acquired in 2016 had increased by the following percentage:Land 100%Building 80%Machinery 50%Equipment 40%It was authorized that such revaluation be recorded in the accounts and that depreciation be recorded onthe basis of revalued amount.Required:a. Prepare journal entry to record the revaluation on January 1, 2019.b. Prepare the journal entry to record the depreciation for 2019.c. Prepare the journal entry to record the piecemeal realization of the revaluation surplus.d. Present the assets in the statement of financial position on December 31, 2019.ABC Corporation Asset Acquisition Data December 31, 2020 Asset Acquisition Data 1. Vehicle for $ 86,500 with 8 years of useful life with $ 25,000 of residual value acquired in January 2017 2. Building and land with a total of $ 2,014,175 with 30 years of useful life. The land cost $ 855,000 and the building has a salvage value of $ 330,000. Acquired in January 2007 Instructions: Audit the expense and accumulated depreciation of these assets|