Fundamental Accounting Principles Volume 2 17th Edition By Kermit D. Larson test bank

131)       Discuss accounting for an impairment of property, plant and equipment.













132)       Matador & Company was preparing the annual financial statements and, as part of its year-end procedures, prepared the following schedule based on adjusted values at March 31, 2023:



Asset
Cost
Accumulated Depreciation
Recoverable Amount

Furniture
$25,000
$20,000
$15,000

Computer
$2,000
$1,000
$-

Land
$105,000
$-
$125,000

Machine
$90,000
$25,000
$45,000


 Record the entry for any impairment loss assuming that Matador & Company recorded no impairment losses in previous years.













133)       Matador & Company was preparing the annual financial statements and, as part of its year-end procedures, prepared the following schedule based on adjusted values at March 31, 2023:



Asset
Cost
Accumulated Depreciation
Recoverable Amount
 
 
 

 
Residual Value
Depreciation Method
Remaining Life
 
 
 

Furniture
$25,000
$20,000
$10,000
$500
Straight Line
3 years

Computer
$2,000
$1,000
$500
$-
Double Declining
5 years

Land
$105,000
$-
$90,000
N/A
N/A
Unlimited

Machine
$90,000
$25,000
$35,000
$5,000
Straight Line
3 years


 Record the entry for any impairment loss assuming that Matador & Company recorded no impairment losses in previous years. Record the entry for depreciation on each of the assets at March 31, 2023. Assume there was no change in residual or useful lives regardless of impairment losses.













134)       Discuss accounting for intangible assets.













135)       On January 4, 2022, SportsWorld purchased a patent for $35,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent for the calendar year 2023.













136)       Hawaii Kai purchased a leasehold property for $8,500,000. The leasehold expires in 15 years. Prepare the journal entry to record the first year's depreciation expense.













137)       GenX Music purchased a music distributor's collection of songs for $1,423,000. The copyrights are expected to last another 34 years. Prepare the journal entry to record the amortization expense for the first year.













138)       Explain what could cause the impairment of goodwill. How often should goodwill be tested to see if it is impaired?













139)       The following information is available for a piece of A Company's machinery:



Machine:

Component
Date of Purchase
Depreciation Method
Cost
Est. Residual
Est. Life
Accum. Dep. at Dec. 31, 2021, Year-End

Electronic Controller
April 1/22
Straight-line
$ 5,000
$ 0
5 years
$750

Motor
April 1/22
Units of Production
100,000
10,000
50,000 hours
2,700

 
 
 
$105,000
 
 
$3,450


 On November 1, 2022, the electronic controller was replaced with a new one costing $8,000 purchased for cash. The new controller had an estimated residual value of $1,000 and an estimated useful life of 5 years. During 2022 the machinery was used for 3,200 hours from January 1 to October 31 and 650 hours from November 1 to December 31. Required: Record depreciation on machinery and the controller replacement for 2022. Round depreciation amounts to the nearest dollar.













140)       Property, plant and equipment are assets held for sale.

       ⊚   true