Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 11, Problem 1CCTC
Target Case
• LO11–2, LO11–8, LO11–9
Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This material is also available under the Investor Relations link at the company’s website (www.target.com).
Required:
1. Compare the property and equipment listed in the balance sheet with the list in Note 14. What are the estimated useful lives for recording
2. Which depreciation method does Target use for property and equipment for financial reporting? Which depreciation method is used for tax purposes? Why might these methods be chosen?
3. How does Target record repairs and maintenance expense?
4. How does Target account for impairment of property and equipment? Were any impairments recorded for the year ended January 30, 2016? If so, what was the amount and what were the reasons for the impairments?
5. From Notes 15 and 16, what was the amount of intangible assets for the year ended January 30, 2016? Were any impairments related to intangible assets recorded for the year ended January 30, 2016? If so, what was the amount and what were the reasons for the impairments?
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Problem No. 8
Use the following information for the next four (4) questions:
AACA Corp. is in the process of preparing its financial statements for the year ended Dec. 31, 2022.
The following represent various information about the entity’s intangible assets.
On May 1, 2022, AACA sold a patent in exchange for a P5,000,000 non-interest bearing note due on May 1, 2025. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2022 was 14%. The collection of the note receivable is reasonably assured. The patent was purchased for P3,150,000 on Sept. 1, 2018. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life.
In 2022, AACA developed a new machine and secured a patent for it. The following expenses were incurred in developing and patenting the machine:
Research and development laboratory expenses
P1,500,000…
On January 1, 2022, Ivanhoe Inc., a construction company, leased an excavator from Oriole inc. The lease terms are as follows:
Annual lease payments of $26.900 at the beginning of each year for five years
At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $8.100
The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee)
Ivanhoe Inc. has a December 31 year end
•
•
.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Prepare the journal entries for 2022 for Ivanhoe Inc. Assume Ivanhoe Inc. follows IFRS. (List all debit entries before credit entries. Credit
account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.
Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the
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Chapter 11 Solutions
Intermediate Accounting, 10 Ed
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Briefly explain the differences and similarities...Ch. 11 - Prob. 11.12QCh. 11 - Prob. 11.13QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Prob. 11.21QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.8BECh. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.18BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.20BECh. 11 - Prob. 11.21BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Prob. 11.10ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Prob. 11.26ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.35ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.12PCh. 11 - Prob. 11.14PCh. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4DMPCh. 11 - Prob. 11.8DMPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Prob. 11.11DMPCh. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16DMPCh. 11 - Target Case LO112, LO118, LO119 Target...
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