Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 17.5EP
Machinery and equipment
- a. Depreciation expenditures should be debited and
accumulated depreciation should be credited. - b. Depreciation expenses should be debited and machinery and equipment should be credited.
- c. Depreciation expense is allocated and recorded at the government-wide level with a debit to the functions or programs of government and a credit to accumulated depreciation.
- d. Because depreciation does not involve the use of financial resources, it is not necessary for the government to record it at the fund level or government-wide level.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Inspector Gadget Ltd has a policy of writing off development expenditure to the Income
Statement as was incurred. In preparing its financial statements for the year 20X7 it became
aware that under IFRS rules qualifying expenditure should be treated as an intangible asset.
Below is the qualifying expenditure for the company:
Year ended 30 Sep 20X4
Year ended 30 Sep 20X5
Year ended 30 Sep 20X6
Year ended 30 Sep 20X7
$'000
300
240
800
400
All capitalized expenditure is deemed to having a four year life. Assume that amortization
starts at the beginning of the accounting period following capitalization. Inspector Gadget
Ltd has no development expenditure before that for the year ended 30 September 20X4.
Required:
b. Treating the above as the correction of an error in applying an accounting policy,
calculate the amounts that should appear in the income statement and statement of
financial position (including comparative figures) and statement of changes in equity
of the company inb respect…
C & M Securities made several expenditures during the current fiscal year, including the following:(a)For each of the items listed below, indicate whether the cost should be debited to land, buildings, equipment, land improvements, or an expense account.
Amount
Description of Expenditure
1.
$150,000
Acquisition of a piece of land to be used as a building site
No effectEquipmentBuildingExpense or Land improvementsLandExpenseExpense or BuildingsLand improvements
2.
3,000
Demolition of a small building on the land, to make way for the new building
Expense or BuildingsNo effectLand improvementsBuildingExpenseEquipmentLandExpense or Land improvements
3.
7,500
Levelling of the land to prepare it for construction of the new building
No effectLand improvementsExpense or Land…
Jenny Company commenced operations in the current year. A number of expenditures were made during the current year that were debited to one account intangible assets. What total amount should be reported as intangible assets?
Chapter 5 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 5 - What are general capital assets? How are they...Ch. 5 - Explain what disclosures the GASB requires for...Ch. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - What is the accounting difference between using...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - What is a service concession arrangement, and why...
Ch. 5 - Prob. 13CCh. 5 - Prob. 14CCh. 5 - Prob. 15CCh. 5 - Under GASB standards, which of the following would...Ch. 5 - Two new copiers were purchased for use by the city...Ch. 5 - Maxim County just completed construction of a new...Ch. 5 - A capital projects fund would probably not be used...Ch. 5 - Machinery and equipment depreciation expense for...Ch. 5 - Prob. 17.6EPCh. 5 - Prob. 17.7EPCh. 5 - Callaway County issued 10,000,000 in bonds at 101...Ch. 5 - Neighborville enters into a lease agreement for...Ch. 5 - Neighborville enters into a lease agreement for...Ch. 5 - Prob. 17.11EPCh. 5 - Prob. 17.12EPCh. 5 - Prob. 17.13EPCh. 5 - Arbitrage rules under the Internal Revenue Code a....Ch. 5 - Prob. 17.15EPCh. 5 - Make all necessary entries in the appropriate...Ch. 5 - Prob. 19EPCh. 5 - Prob. 20EPCh. 5 - In the current year, the building occupied by...Ch. 5 - Prob. 22EPCh. 5 - Make all necessary entries in a capital projects...Ch. 5 - The year-end pre-closing trial balance for the...Ch. 5 - Prob. 25EPCh. 5 - This year Riverside began work on an outdoor...
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
- Routine maintenance costs for capital assets are deducted in the year the amount is paid or incurred, not capitalized as an improvement to the asset.arrow_forward7. Which of the following statements is true regarding capitalization of interest? A) The minimum amount of interest to be capitalized is determined by multiplying a weighted average interest rate by the amount of average accumulated expenditures on qualifying assets during the period B) Interest cost capitalized in connection with the purchase of land to be used as a building site should be debited to the land account and not to the building account. C) The amount of interest cost capitalized during the period should not exceed the actual interest cost incurred. D) When excess borrowed funds not immediately needed for construction are temporarily invested, any interest earned should be offset against interest cost incurred when determining the amount of interest cost to be capitalized.arrow_forwardThe adjusted cost base (or capital cost) of an asset includes a number of costs. Indicate which cost would NOT be considered part of the capital cost. A) Legal fees incurred to acquire the asset. B) Duties paid on the asset. C) Fire and theft insurance paid on the asset. D) Non-refundable provincial sales taxes paid on the asset. E) An appropriate allocation of overhead.arrow_forward
- The balance in the Accumulated Depreciatin account represents: A) The amount charged to expense in the current period B) A Contra-expense account C) A Cash fund to be used to replace plant assets D) The amount charged to depreciation expense since the acquisition of the plant assetarrow_forwardWhich of the following disclosures must be included in the notes to the financial statements? the model numbers of each depreciable asset. the methods used in computing depreciation for each major class of depreciable asset. the rate of return on investment for each major class of depreciable asset. all of these choices.arrow_forwardAccess the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Determine the specific citation for each of the following items: 1. The disclosure requirements in the notes to the financial statements for depreciation on property, plant, and equipment. 2. The criteria for determining commercial substance in a nonmonetary exchange. 3. The disclosure requirements for interest capitalization. 4. The elements of costs to be included as R&D activities.arrow_forward
- Directions: Read and analyze the following standards and answer what is required. Required: Write the definition, recognition, measurement and derecognition if any in the chart above provided for the following: Intangible assets Impairment of assets Investment property Agriculture Borrowing cost Government grantarrow_forwardplease choose from the following accounts: Accounts Payable Accumulated Depreciation - Buildings Accumulated Depreciation - Equipment Accumulated Depreciation - Leasehold Improvements Accumulated Depreciation - Machinery Accumulated Depreciation - Vehicle Overhaul Accumulated Depreciation - Vehicles Advertising Expense Asset Retirement Obligation Buildings Cash Common Shares Contributed Surplus - Donated Capital Cost of Goods Sold Deferred Revenue - Government Grants Depreciation Expense Donation Revenue Equipment Finance Expense Gain on Disposal of Buildings Gain on Disposal of Equipment Gain on Disposal of Machinery Gain on Disposal of Vehicles Gain on Vehicle Overhaul Gain or Loss in Value of Investment Property GST Receivable Interest Expense Interest Payable Inventory Investment Property Land Land Improvements Legal Expense Loss on Disposal of Buildings Loss on Disposal of Equipment Loss on Disposal of Machinery Loss on Disposal of Vehicles Loss on Vehicle Overhaul Machinery…arrow_forwardThe value of "Property, Plant, & Equipment, net" reported on the balance sheet represents: A) The allocated cost of using the asset for the year. B) The fair market value of the assets. C) The historical cost of the assets D) The cost of the assets not yet expensed on the income statement. The gain or loss from selling an asset reported on the income statement is computed as: A) The difference in the cash received and the historical cost of the assets B) The difference in the fair market value of the asset and the historical cost of the asset. C) The difference in the amount of cash received for the asset less the cost to sell the D) The difference in the book value o f the asset and the cash received for the assetarrow_forward
- Under IFRS, when an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct?a. When an asset is revalued, the entire class of property, plant, and equipment (such as Land) to which that asset belongs must be revalued.b. When an asset is revalued, it is reported on the balance sheet at its current replacement cost.c. Revaluations of property, plant, and equipment must be made at least every three years.d. The revalued assets must be reported in a special section of the balance sheet separate from those assets measured using the cost model.arrow_forwardUnder current standards, a subsequent expenditure on an item of property, plant and equipment is most likely to be capitalized to the asset account. expensed debited to the related accumulated depreciation account. a or carrow_forwardA recent annual report for Commonwealth Delivery included the following note: NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY AND EQUIPMENT. Expenditures for major additions, improvements and flight equipment modifications are capitalized when such costs are determined to extend the useful life of the asset or are part of the cost of acquiring the asset. Expenditures for equipment overhaul costs of engines or airframes prior to their operational use are capitalized as part of the cost of such assets as they are costs required to ready the asset for its intended use. Maintenance and repairs costs are charged to expense as incurred... Assume that Commonwealth Delivery made extensive repairs on an existing building and added a new wing. The building is a garage and repair facility for delivery trucks that serve the Denver area. The existing building originally cost $714,000, and by the end of last year, it was half depreciated based on use of the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Fixed Asset Replacement Decision 1235; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=LJRzn9K8Nwk;License: Standard Youtube License