Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 11, Problem 11.20BE
To determine
To prepare:
Given information:
Cost of testing material and supplies is $600,000.
Cost of research consultant is $100,000.
Cost of planning and designing consultant is $135,000.
Cost of laboratory equipment is $900,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Use the following information for the next two questions:
On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was
used to finance the construction of a qualifying asset:
Principal
P1,000,000
12% bank loan (1.5 years)
10% bank loan (3-year)
P8,000,000
Expenditures made on the qualifying asset were as follows:
Jan.1
P 5,000,000
4,000,000
March 1
August 31
December 1
3,000,000
2,000,000
Construction was completed on December 31, 20x1.
.How much borrowing costs are capitalized to the cost of the constructed qualifying asset?
Manthei University, a private university, has provided the following information concerning selected transactions. Prepare in general journal form the entries required for each of the transactions. (If no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field.)
The university was awarded a federal grant in the amount of $1,800,000 to be used for a specified research project (determined to be a nonexchange transaction). During the year, the entire $1,800,000 was received and expenses for the specified project totaled $1,000,000.
Ira Beaker, a renowned chemist and alumnus, donated $7,000,000 to be used for the construction of a new chemistry building to be named Beaker Hall. The gift is to be paid to the university in equal installments over a 2-year period; the sum for the current year was received in cash.
Cash outlays of $2,750,000 were made during the year for construction in progress on the new chemistry building. Other…
.
Chapter 11 Solutions
Intermediate Accounting (2nd Edition)
Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2QCh. 11 - Prob. 11.3QCh. 11 - Prob. 11.4QCh. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Prob. 11.11QCh. 11 - What is the maximum amount of interest to be...Ch. 11 - Prob. 11.13QCh. 11 - Prob. 11.14QCh. 11 - Prob. 11.15QCh. 11 - Do firms expense all costs incurred after the...Ch. 11 - Prob. 11.17QCh. 11 - Prob. 11.18QCh. 11 - When using the double-declining balance...Ch. 11 - Prob. 11.20QCh. 11 - Will a firm recognize a loss on the income...Ch. 11 - Prob. 11.22QCh. 11 - Prob. 11.23QCh. 11 - Prob. 11.24QCh. 11 - Prob. 11.25QCh. 11 - Differentiate between a leasehold and a leasehold...Ch. 11 - Prob. 11.27QCh. 11 - Prob. 11.28QCh. 11 - Prob. 11.29QCh. 11 - Prob. 11.30QCh. 11 - Prob. 11.31QCh. 11 - Prob. 11.32QCh. 11 - Prob. 11.33QCh. 11 - Prob. 11.34QCh. 11 - Prob. 11.35QCh. 11 - Prob. 11.36QCh. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - In a nonmonetary exchange does a firm record the...Ch. 11 - Prob. 11.42QCh. 11 - Prob. 11.43QCh. 11 - Prob. 11.44QCh. 11 - Prob. 11.45QCh. 11 - Prob. 11.1MCCh. 11 - On January 1, Year 1, Bluebird Inc. borrowed 10...Ch. 11 - Prob. 11.3MCCh. 11 - Prob. 11.4MCCh. 11 - Prob. 11.5MCCh. 11 - Prob. 11.6MCCh. 11 - Prob. 11.7MCCh. 11 - Prob. 11.8MCCh. 11 - Determining Acquisition Cost. Haply, Inc. incurred...Ch. 11 - Determining Acquisition Cost. Tarpley, Inc....Ch. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Prob. 11.8BECh. 11 - Depreciation, Straight-Line Method. Hermit...Ch. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Derecognition Due to Abandonment. Greene Corp....Ch. 11 - Prob. 11.15BECh. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - Prob. 11.18BECh. 11 - Prob. 11.19BECh. 11 - Prob. 11.20BECh. 11 - Leasehold Improvements. At the beginning of its...Ch. 11 - Determining Acquisition Cost. St Charles Flooring...Ch. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Acquiring an Asset with a Note Payable (Deferred...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.11ECh. 11 - Expensing versus Capitalizing ExpendituresAnalysis...Ch. 11 - Depreciation Methods, Disposal. Kurtis Koal...Ch. 11 - Prob. 11.14ECh. 11 - Depreciation Methods, Partial-Year Depreciation....Ch. 11 - Prob. 11.16ECh. 11 - Depreciation Methods. Ace Manufacturing, Inc....Ch. 11 - Prob. 11.18ECh. 11 - Depreciation Methods, Partial-Year Depreciation,...Ch. 11 - Prob. 11.20ECh. 11 - Partial-Year Depreciation, Sale of Property,...Ch. 11 - Prob. 11.22ECh. 11 - Disclosure of Property, Plant, and Equipment. Use...Ch. 11 - Disclosure of Property, Plant, and Equipment,...Ch. 11 - Prob. 11.25ECh. 11 - Research and Development Activities. During the...Ch. 11 - Prob. 11.27ECh. 11 - Goodwill Computation, Acquisition of Intangibles,...Ch. 11 - Prob. 11.29ECh. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - Prob. 11.34ECh. 11 - Prob. 11.35ECh. 11 - Prob. 11.36ECh. 11 - Prob. 11.37ECh. 11 - Exchanges Lacking Commercial Substance, Cash...Ch. 11 - Prob. 11.39ECh. 11 - Prob. 11.41ECh. 11 - Prob. 11.42ECh. 11 - Note Payable Exchanged for a Plant Asset (Deferred...Ch. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Depreciation Methods and Depreciation Schedules....Ch. 11 - Prob. 11.5PCh. 11 - Disposals of Long-Term Operating AssetsAnalysis,...Ch. 11 - Goodwill and Bargain Purchase Computations. The...Ch. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Judgment Case 1: Property, Plant, and Equipment:...Ch. 11 - Prob. 2JCCh. 11 - Financial Statement Analysis Case Financial...Ch. 11 - Surfing the Standards Cases Surfing the Standards...Ch. 11 - Prob. 2SSCCh. 11 - Surfing the Standards Case 3: Involuntary...Ch. 11 - Prob. 4SSCCh. 11 - Prob. 5SSCCh. 11 - Prob. 1BCCCh. 11 - Prob. 2BCC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetarrow_forwardPrepare the journal entries of the following independent transactions. 1. Record the collection of corporate income taxes by the BIR in its Agency books in the amount of P123,540. 2. Agency XYZ issued check to Nongovernment organizations (NGO's) for fund assistance in the amount of P24,000,000. 3. The agency received the following allotment for the year 2022: Capital Outlay 40,000,000 Maintenance and other operating expenses 42,000,000 Personal Services 90,000,000 Financial Expenses 6,000,000 4. The officer of the agency was granted a cash advance of P50,000 for his official travel to Manila. The cash was subject for liquidation to release him from the accountability and avoid disallowance. 5. Agency ZXC had an unused NCA of P145,050 which was considered as lapsed NCA for the year 2021. The agency could not use all funds due to time constraint and returned documents due to some lacking attachments. 6. Record the liquidation of schools that was granted to accountable officer for payment…arrow_forwardABC corporation received P10,000,000 from the City of Caloocan in relation to defraying its research expenses in relation to COVID-19 for the next 5 years. The research expenses will be incurred by the entity as follows: 1st year 2nd • year 3rd year Ath year 5th year P2.000.000 1,000.000 3.000.000 4.000.000 2 500.000 P12,500,000 The grant income to be recognized in the second year should be?arrow_forward
- Cc.63.arrow_forwardOn January 01, 2021 Commission on Audit purchased an item of equipment for P550,000. The purchase price was funded by raising a loan of P 605,000 (including 5,000 loan raising fees). The loan is secured against the equipment. In January 2021, COA incurred costs of P 20,000 in transporting the equipment to the entity’s site and P 100,000 in installing the equipment at the site. At the end of the equipment’s 5-year useful life the entity is required to dismantle the equipment and restore the land upon which the factory is built. The present value of the cost of dismantling the equipment and restoring the environment is estimated to be P100,000. COA’s engineer incurred material cost, P55,000 and labor cost, P65,000 in modifying the equipment so that it can produce the government forms needed by Management. The equipment was ready for use on March 01, 2021. However, because of low initial production levels the entity incurred a loss of P23,000 on operating the equipment during March.…arrow_forwardAt the beginning of current year, Exodus Company purchased a machine for 8,000,000 and received a government grant of 2,000,000 toward the capital cost. The machine is to be depreciated on a straight line basis over 10 years and estimated to have a residual value of 500,000 at the end of this period. Required: Prepare journal entries for the current year assuming the grant is accounted for as deferred income and deduction from asset.arrow_forward
- Use the following information for the next two questions: On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: Principal 12% bank loan (1.5 years) ₱ 1,000,000 10% bank loan (3-year) 8,000,000 Expenditures made on the qualifying asset were as follows: Jan. 1 ₱ 5,000,000 March 1 4,000,000 August 31 3,000,000 December 1 2,000,000 Construction was completed on December 31, 20x1. How much borrowing costs are capitalized to the cost of the constructed qualifying asset? 1,045,000 c. 1,026,667 971,111 d. 920,000 How much is the cost of the qualifying asset on initial recognition? 13,010,000 c. 14,920,000 15,045,000 d. 14,971,111arrow_forwardFreitas Corporation was organized early in 2024. The following expenditures were made during the first few months of the year: Attorneys' fees in connection with the organization of the corporation State filing fees and other incorporation costs Purchase of a patent Legal and other fees for transfer of the patent Purchase of equipment Preopening salaries and employee training Total Required: Prepare a summary journal entry to record the $113,300 in cash expenditures. $ 13,200 4,200 20,900 2,900 31,000 41,100 $ 113,300arrow_forwardMinistry of Tourism makes an appropriation of RO 450,000 for the development of tourist places. The financial transactions during the year, Salary paid to employees RO 50,000. An order is placed for purchasing some equipment for RO 200,000 The amount was transferred to debt service fund RO 6,000. Which one of the following is unreserved fund balance? a. RO 206,000 b. RO 194,000 c. None of the options d. RO 450,000arrow_forward
- Monroe Company is engaged in a number of research and development projects. Its accounting policy with regards to research and development is to capitalize expenditure as far as allowed by PAS 38 Intangible Assets. At June 30, 2024, the following balances existed in the company's accounting records: Project A : Development completed June 30, 2022. Total expenditure P200.000. Being amortized over five years on the straight-line basis in accordance with the company's standard policy. Balance at June 30, 2024: P120,000. Project B: A development project commenced July 1, 2019. Total expenditures in the years ended June 30, 2023 and June 30, 2024 totaled P175,000. During the year ended June 30, 2025, it became clear that a competitor had launched a superior product and the project was abandoned. Further development expenditure in the year ended June 30, 2025 amounted to P55,000. Project C: Development commenced October 1, 2020. Expenditures per year: Year ended June 30, 2025,…arrow_forwardThe Pharm Co. self-constructed an asset for its own use. Construction started on Dec. 31, 2019. Costs incurred during the year were as follows: Jan 1- P400,000; Apr. 1 – P500,000; Aug.1 – P480,000; Dec. 1 – P180,000. The company had a two-year. 18% loan of P500,000, specifically obtained to finance the asset construction. Determine the average accumulated expenditures for the self-constructed assets and capitalized interest added to the cost of the self-constructed asset.arrow_forwardThis topic is about borrowing costs. Please choose the letter of the correct answer.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Fixed Asset Replacement Decision 1235; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=LJRzn9K8Nwk;License: Standard Youtube License