会计学原理 第二版 英文版 wiley出版社 第10章 答案.doc

Solutions Manualto accompanyPrinciples of Accounting 2nd editionbyJerry Weygandt, Keryn Chalmers, Lorena Mitrione Michelle Fyfe, Susana Yuen, Donald Kieso, Paul KimmelChapter 10Property, plant and equipment; intangible assets and goodwill; mineral resources and biological assetsJohn Wiley & Sons Australia, LtdCHAPTER 10Property, plant and equipment; intangible assets and goodwill; mineral resources and biological assets ASSIGNMENT CLASSIFICATION TABLELearning ObjectivesQuestionsBriefExercisesExercisesProblems Set A1.Describe how the cost principle applies to PPE.1, 2, 3, 271, 21, 212.Explain the concept of depreciation and compute periodic depreciation using different methods.4, 5, 7, 8, 223, 4, 5, 6, 73, 4, 52, 3, 43.Identify capital expenditures and explain the entries for these expenditures.6, 9, 19, 244.Describe the measurement of PPE subsequent to acquisition and how to account for the disposal of PPE.10, 11, 23, 289, 1065, 65.Explain the basic issues related to accounting for intangible assets and goodwill.14, 15, 16,17, 18128, 97, 86.Explain the basic uses related to accounting for mineral resources.12, 131177.Explain the basic issues related to accounting for agricultural activity and biological assets.8108.Indicate how plant PPE assets, intangible assets and goodwill, mineral resources, and agricultural activity are reported and analysed.20, 2113, 14115, 7, 9*9.Explain how to account for the exchange of PPE.25, 2615, 1612, 13ASSIGNMENT CHARACTERISTICS TABLEProblemNumberDescriptionDifficultyLevelTimeAllotted (min.)1Determine acquisition costs of land and building.Simple20-302Compute depreciation under different methods.Simple30-403Compute depreciation under different methods.Moderate30-404Calculate revisions to depreciation expense.Moderate20-305Journalise a series of equipment transactions related to purchase, sale, retirement and depreciation.Moderate40-506Record disposals.Simple30-407Prepare entries to record transactions related to acquisition and amortisation of intangibles; prepare the intangible assets section.Moderate30-408Prepare entries to correct errors made in recording and amortising intangible assets.Moderate30-409Calculate and comment on asset turnover ratio.Moderate10-20 Accuracy checked 10-37BLOOMS TAXONOMY TABLECorrelation Chart between Blooms Taxonomy, Study Objectives and End-of-Chapter Exercises and ProblemsLearning ObjectiveKnowledgeComprehensionApplicationAnalysisSynthesisEvaluation1.Describe how the cost principle applies to PPE.Q10-1Q10-2Q10-3Q10-28E10-1P10-1BE10-1BE10-2E10-22.Explain the concept of depreciation and compute periodic depreciation using different methods.Q10-5Q10-4Q10-6Q10-7Q10-8Q10-22BE10-3BE10-4BE10-5BE10-6 E10-3 E10-4 P10-2 P10-4BE10-7E10-5P10-33.Identify capital expenditures, and explain the entries for these expenditures.Q10-9Q10-19Q10-244.Describe the measurement of PPE subsequent to acquisition and how to account for the disposal of PPE.Q10-10Q10-11Q10-28BE10-9BE10-10E10-6P10-5P10-65.Explain the basic issues related to accounting for intangible assets.Q10-18Q10-14Q10-15Q10-16Q10-17BE10-12E10-8E10-9P10-7P10-86.Explain basic issues related to accounting for mineral resources.Q10-12Q10-13BE10-11E10-77.Explain the basic issues related to accounting for agricultural activity and biological assets.BE10-8E10-108.Indicate how PPE assets, intangible assets, goodwill mineral resources and agricultural activity are reported and analysed.Q10-23BE10-13BE10-14E10-11Q10-20Q10-21P10-5P10-7P10-9*9.Explain how to account for the exchange of PPE.Q10-25Q10-26BE10-15BE10-16E10-11E10-13 Broadening Your PerspectiveCommunicationExploring the WebResearch in ActionGroup Decision CaseFinancial ReportingComparative AnalysisInterpreting Financial StatementsGroup DecisionEthics CaseComparative AnalysisANSWERS TO QUESTIONS1.For PPE assets, the cost principle means that cost consists of all expenditures necessary to acquire the asset and make it ready for its intended use.2.Examples of land improvements include driveways, parking lots, fences, and underground sprinklers.3.(a)When only the land is to be used, all demolition and removal costs of the building less any proceeds from residual materials are necessary expenditures to make the land ready for its intended use.(b)When both the land and building are to be used, necessary costs of the building include remodeling expenditures and the cost of replacing or repairing the roofs, floors, wiring, and plumbing.4.You should explain to the CEO that depreciation is a process of allocating the cost of a PPE asset to expense over its service (useful) life in a rational and systematic manner. Recognition of depreciation is not intended to result in the accumulation of cash for replacement of the asset.5.(a)Residual value, also called salvage value, is the expected value of the asset at the end of its useful life.(b)Residual value is used in determining depreciation in each of the methods except the reducing-balance method.6.Assets are depreciated because their usefulness and revenue-producing ability will decline over their useful life. Although expenditures incurred on repair and maintenance will help to maintain the operating efficiency and productive life of the assets, the assets revenue-producing ability will still decline over the years due to wear and tear and obsolescence. In other words, assets that have been repaired and maintained will eventually wear out. Therefore, expenditure on repair and maintenance does not negate the need for depreciation, but merely maintains the assets condition to the standard during their useful life. 7.The effects of the three methods on annual depreciation expense are: Straight-line constant amount; units of production varying amount; reducing-balance decreasing amounts.8.A revision of depreciation is made in current and future years but not retrospectively. The rationale is that continual restatement of prior periods would adversely affect confidence in the financial statements.9.Repair expenses are ordinary repairs made to maintain the operating efficiency and expected productive life of the asset. Capital expenditures are additions and improvements made to increase efficiency, productivity or expected useful life of the asset. Repair expenses are recognised as expenses when incurred; capital expenditures are generally debited to the PPE asset affected.10.In a sale of PPE assets, the carrying amount of the asset is compared to the net proceeds received from the sale. If the net proceeds of the sale exceed the carrying amount of the PPE asset, a gain on disposal occurs. If the proceeds of the sale are less than the carrying amount of the PPE asset sold, a loss on disposal occurs.Answers to Questions (continued) 11.The PPE asset and its accumulated depreciation should continue to be reported on the statement of financial position without further depreciation adjustment until the asset is retired. Reporting the asset and related accumulated depreciation on the statement of financial position informs the reader of the financial statements that the asset is still in use. However, once an asset is fully depreciated, even if it is still being used, no additional depreciation should be taken. In no situation can the accumulated depreciation on the PPE asset exceed its cost.12.Mineral resources consist of underground deposits of oil, gas and minerals. These long-lived productive assets have two distinguishing characteristics: they are physically extracted in operations, and they are replaceable only by an act of nature.13.Amortisation of the capitalised costs is the allocation of the cost of mineral resources to expense in a rational and systematic manner over the resources useful life. It is computed by multiplying the amortisation cost per unit by the number of units extracted and sold.14.The terms depreciation and amortisation are both concerned with writing off the cost of an asset to expense over the periods benefited. Depreciation refers to allocating the cost of a PPE asset to expense and amortisation to allocating the cost of an intangible asset to expense or the cost of a mineral resource as an expense.15.The graduate is not correct. The cost of an intangible asset should be amortised over that assets useful life (the period of time when operations are benefited by use of the asset). Occasionally, the useful life or amortisation period will be the same as the legal life, but many other factors in addition to legal life can affect useful life. In addition, some intangibles have indefinite lives and therefore are not amortised at all.16.The favorable attributes which could result in goodwill include exceptional management, desirable location, good customer relations, skilled employees, high-quality products, and harmonious relations with labour unions.17.Goodwill is the value of many favorable attributes that are intertwined in the entity. Goodwill can be identified only with the entity as a whole and, unlike other assets, cannot be sold separately. Goodwill can only be sold if the entire business is sold. And, if goodwill appears on the statement of financial position, it means the company has purchased another company for more than the fair value of the net assets acquired.18.Brand names can appear in the statement of financial position only when: (1) the asset definition and recognition criteria are satisfied; and (2) the brands have been purchased as a result of an acquisition. Internally generated brand names cannot be recognised as assets in the statement of financial position.19.Research and development costs present several accounting problems. It is sometimes difficult to assign the costs to specific projects, and there are uncertainties in identifying the extent and timing of future benefits. As a result, the accounting rules require that research costs be recorded as an expense when incurred and development costs, under certain conditions, can be capitalised.20.Baggin Companys asset turnover ratio is computed as follows: = = 1.66 timesAnswers to Questions (continued) 21.Since Wanzo uses the straight-line depreciation method, its depreciation expense will be lower in the early years of an assets useful life as compared to using an accelerated method. Chengs depreciation expense in the early years of an assets useful life will be higher as compared to the straight-line method. Wanzos net profit will be higher than Chengs in the first few years of the assets useful life. And, the reverse will be true late in an assets useful life.22.Yes, the tax rules allow a company to use a different depreciation method on the tax return than is used in preparing financial statements. Shuey Company uses an accelerated depreciation method for tax purposes to minimise its income taxes and thereby the cash outflow for taxes.23.According to the AASB 116 Property, Plant and Equipment paragraph 32-33, the fair value of land and buildings is usually determined from market-based evidence by professionally qualified valuers. However, if there is no market-based evidence for fair value due to the nature of the PPE asset and the rarity of the asset being sold, the company may need to estimate fair value using an income or depreciated replacement cost approach. 24.Expensing these costs will make current period profit lower but future period profit higher because there will be no additional depreciation expense in future periods. If the costs are ordinary repairs, they should be expensed.25.When similar assets are exchanged, the gain or loss on disposal is computed as the difference between the carrying amount and the fair value of the asset given up at the time of exchange. Any gain or loss on exchange is recognised immediately.26.Unless the assets exchanged are similar in nature and value, gains and losses on exchange are recognised in the financial statements in the reporting period. A gain (loss) arises if the fair value of the old machine exceeds (is less than) its carrying amount.27.An item of PPE may be gifted or contributed to an entity. For example, land may be contributed to a state government by a developer at no or nominal consideration to enable the state government to develop roads. Even though no cash is exchanged, the PPE should still be recognised at its fair value when acquired.28.The existence of an Asset Revaluation Reserve suggests that Gallery uses a revaluation model for one or more of its asset classes. Subsequent to acquisition, classes of PPE can be measured using the cost model or the revaluation model. Using a revaluation model, if the fair value of the asset increases the asset account is debited and the credit is to the Asset Revaluation Reserve account.SOLUTIONS TO BRIEF EXERCISESBRIEF EXERCISE 10-1All of the expenditures should be included in the cost of the land. Therefore, the cost of the land is $61000 or ($50000 + $3000 + $2500 + $2000 + $3500).BRIEF EXERCISE 10-2The cost of the truck is $51 500 (cash price $50 000 + sign writing $1 500). The expenditures for insurance and motor vehicle license should not be added to the cost of the truck.BRIEF EXERCISE 10-3Depreciable cost of $34000 or ($40000 $6000). With a four-year useful life, annual depreciation is $8500 or ($34000 4). Under the straight-line method, depreciation is the same each year. Thus, depreciation is $8500 for both the first and second years.BRIEF EXERCISE 10-4It is likely that management requested this accounting treatment to boost reported profit. Land is not depreciated; thus, by reporting land at $80000 above its estimated value and buildings at $80 000 below their fair value, the company increased yearly profit by $4000 or the reduction in depreciation expense. This practice is not ethical because management is knowingly misstating asset values.BRIEF EXERCISE 10-5The reducing balance rate is 50% or (25% 2) and this rate is applied to the carrying amount at the beginning of the year. The computations are:Carrying amountRate=DepreciationYear 1Year 2$40000($40000 $20000)50%50%$20000$10000BRIEF EXERCISE 10-6The depreciation cost per unit is 20 cents per km computed as follows:Depreciable cost ($30500 $500) 150000 km = $0.20Year 130000 km $0.20 = $6000Year 220000 km $0.20 = $4000BRIEF EXERCISE 10-7Carrying amount, 1/1/10$23000Less: Residual value 2000Depreciable cost$21000Remaining useful life 4 yearsRevised annual depreciation ($21000 4)$5250BRIEF EXERCISE 10-8Carrying amount cannot be higher than recoverable amount. The recoverable amount is the higher of selling price (net of costs) and value in use. Thus the equipments recoverable amount is $30000 ($30000 $20000). Therefore, the equipment has to be written down to its recoverable amount. The $15000 impairment loss is recognised as an expense in the income statement. BRIEF EXERCISE 10-9(a)Accumulated Depreciation Delivery Equipment41000Delivery Equipment41000(b)Accumulated Depreciation Delivery Equipment37000Loss on Disposal4000Delivery Equipment41000Cost of delivery equipment$41000Less accumulated depreciation37000Carrying amount at date of disposal4000Proceeds from sale 0Loss on disposal$4000BRIEF EXERCISE 10-10(a)30 September 2010Depreciation Expense Office Equipment4500Accumulated Depreciation Office Equipment4500(b)30 September 2010Cash20000Accumulated Depreciation Office Equipment46500Loss on Disposal5500Office Equipment72000Cost of office equipment$72000Less accumulated depreciation 46500*Carrying amount at date of disposal25500Proceeds from sale 20000Loss on disposal$5500*$42000 + $4500BRIEF EXERCISE 10-11(a)Amortisation cost per unit = $7000000 28000000 = $.25 amortisation cost per ton$.25 6000000 = $1500000Amortisation Expense - Mine1500000Accumulated Amortisation - Mine1500000(b)Ore mine$7000000Less: Accumulated amortisation 1500000$5500000BRIEF EXERCISE 10-12(a)31 December 2010Amortisation Expense Patent ($150000 10)15000Accumulated Amortisation - Patents15000(b)Intangible AssetsPatents$135000The cost and accumulated amortisation would be disclosed in the notes to t