Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 11, Problem 11.23E
Disclosure of Property, Plant, and Equipment. Use the information in E11-13, part (a) to prepare the required footnote disclosure for Kurtis Koal Company, Inc.’s property, plant, and equipment for Years 1 and 2, including a statement of its accounting policy and a table with account balances.
E11-13.
| Year | Tons of Coal |
| 1 | 700,000 |
| 2 | 1,400,000 |
| 3 | 1,600,000 |
| 4 | 1,000,000 |
| 5 | 750,000 |
| 6 | 550,000 |
Required
Prepare the depreciation schedules for the machine assuming that Kurtis Koal used the following methods (each case is independent):
- a. Straight-line method.
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Conceptual Question
Identify whether or not each of the following items should be capitalized as intangible
assets from the following list. Explain your reason with relevant accounting standard.
Capitalised
Not capitalized
Employment costs of staff conducting
research activities
Cost of constructing a working model of
a new product
License purchased to permit production
and sale of a product for ten years
Copper Explorations recently acquired the rights to mine a new site. Equipment and a truck were purchased to begin mining
operations at the site. Details of the mining assets follow:
Asset
Mineral rights
Equipment
Truck
View transaction list
Journal entry worksheet
<
2
Date of Purchase
Mar. 1/23
Mar. 1/23
Mar. 1/23
Record the depreciation on the truck.
Date
Dec 31, 2023
Copper's year-end is December 31 and It uses the straight-line method for all mining assets including Intangibles.
Required:
1. Record amortization and depreciation at December 31, 2023, on the mining assets, including the mineral rights.
Note: Enter debits before credits.
Record entry
3
View transaction list
Date
Oct 31, 2025
Clear entry
Journal entry worksheet
<
Note: Enter debits before credits.
Cost
$ 62,400
General Journal
Record the disposal of the truck.
244,800
95,400
Est.
Residual
$0
0
2. Assume the mine was closed on October 31, 2026, and the assets were scrapped. Record the disposal of the assets.
General…
Copper Explorations recently acquired the rights to mine a new site. Equipment and a truck were purchased to begin mining
operations at the site. Details of the mining assets follow:
Asset
Mineral rights
Equipment
Truck
View transaction list
Journal entry worksheet
1
Copper's year-end is December 31 and it uses the straight-line method for all mining assets including Intangibles.
Required:
1. Record amortization and depreciation at December 31, 2023, on the mining assets, including the mineral rights.
Date of Purchase
Mar. 1/23
Mar. 1/23
Mar. 1/23
Record the amortization on the mineral rights.
Note: Enter debits before credits.
Date
Dec 31, 2023
Record entry
View transaction list
Cost
$ 62,480
244,800
95,400
General Journal
Amortization expense, mineral rights
Accumulated amortization, mineral rights
Date
Oct 31, 2026
Clear entry
Journal entry worksheet
1 23
Record the disposal of the equipment.
Note: Enter debits before credits.
Est.
Residual
$0
0
દા
Est. Life
4 yrs
4 yrs
4 yrs…
Chapter 11 Solutions
Intermediate Accounting
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