CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis *1. Rationale for leasing. 1‚ 2‚ 4 1‚ 2 *2. Lessees; classification of leases; accounting by lessees. 3‚ 5‚ 7‚ 8‚ 14 1‚ 2‚ 3‚ 4‚ 5 1‚ 2‚ 3‚ 5‚ 7‚ 8‚ 11‚ 12‚ 13‚ 14 1‚ 2‚ 3‚ 4‚ 6‚ 7‚ 8‚ 9‚ 11‚ 12‚ 14‚ 15‚ 16 1‚ 2‚ 3‚ 4‚ 5‚ 6 *3. Disclosure of leases. 19 2‚ 4‚ 5‚ 7‚ 8 2‚ 3‚ 5 *4. Lessors;
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quiz #1 Accumulated depreciation will be the sum of two years of depreciation expense. Annual depreciation for this asset is ($400‚000 - $10‚000)/5 = $78‚000. The sum of two years depreciation is $156‚000 ($78‚000 + $78‚000). | | | Micah Bartlett Company purchased equipment on January 1‚ 2010‚ at a total invoice cost of $400‚000. The equipment has an estimated salvage value of $10‚000 and an estimated useful life of 5 years. The amount of accumulated depreciation at December 31‚ 2011‚ if
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1) What caused the existing system at ETO to fail? This system was based on the assumption that direct costs and overhead are consumed in the same proportion for all product testing. However‚ this is not the case and therefore the system failed. For example‚ due to the implementation of the vendor certification and the just-in-time delivery‚ some products are already tested and do not need any further tests‚ and ETO faces a decreasing number of the tests performed. On the other hand‚ new components
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Assignment 10-1 Depreciation policy 10 10-2 Valuation models 15 10-3 Depreciation or amortization policy 15 10-4 Component depreciation 20 10-5 Component depreciation 20 10-6 Depreciation: computation 20 10-7 Depreciation schedule 25 10-8 Interpreting depreciation disclosures … 20 10-9 Analysis of four depreciation methods—maximize income (*W) 20 10-10 Identify‚ recalculate depreciation 20 10-11 Depreciation and depletion—schedule‚ entries (*W) 25 10-12 Depreciation and sale
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A. Explain the conventional accounting concept of depreciation accounting. Depreciation is described as a process of systematic and rational cost allocation. The depreciation process is depreciation base‚ useful service life‚ and depreciation methods. Depreciation accounting is a system of accounting that aims the distributed cost value to the less salvage value‚ other basic value of tangible capital assets‚ over the estimated useful life of a unit. It’s process of allocation and not valuation
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Relevant cash flows Answer: d Diff: E . Which of the following statements is most correct? a. The rate of depreciation will often affect operating cash flows‚ even though depreciation is not a cash expense. b. Corporations should fully account for sunk costs when making investment decisions. c. Corporations should fully account for opportunity costs when making investment decisions. d. Statements a and c are correct. e. All of the statements above are correct. Relevant cash flows Answer:
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2. The net cash provided by financing activities during 2013 is a. $1‚100‚000. b. $1‚300‚000. c. $1‚600‚000. d. $1‚800‚000. e. None of the above. 3. Which of the following should be disclosed in a Summary of Significant Accounting Policies? a. Depreciation method followed b. Types of executory contracts c. Amount for cumulative effect of change in accounting principle d. Claims of equity holders e. None of the above Use the following information for the next three questions. The balance sheet data
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required to attempt in the F7 exam. IAS 16‚ Property‚ Plant and Equipment overview There are essentially four key areas when accounting for property‚ plant and equipment that you must ensure that you are familiar with: ¤ initial recognition ¤ depreciation ¤ revaluation ¤ derecognition (disposals). Initial recognition The basic principle of IAS 16 is that items of property‚ plant and equipment that qualify for recognition should initially be measured at cost. One of the easiest ways to remember
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explain why. a. Both the direct and indirect methods will produce the same cash flow from operating activities. True statement; the indirect approach is an alternative method for preparing the statement of cash flows for the direct method. b. Depreciation expense is added back
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capital leased planes comprised of 164 planes. “Capital Leases – Flight Equipment” totaling $107 is equal to the original present value of the planes under capital lease comprised of 7 planes under capital lease. F. Depreciation Expense $186.26 Accumulated Depreciation $186.26 This amount was calculated by using the amount corresponding to “Flight Equipment” of $6‚574 on the balance sheet minus the residual value of 15% divided by 30 years: [(6‚574 – (6‚574*.15)]/30 = 186.26
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