Problem 11–2 (continued)
Requirement 2
CORD COMPANY
Depreciation and Amortization Expense
For the Year Ended December 31, 2016
Land Improvements:
Cost $192,000
Straight-line rate (1 ÷ 12 years) x 8 1/3%
Buildings:
Book value, 1/1/16 ($1,500,000 – 328,900) $1,171,100
Machinery and equipment:
Balance, 1/1/16 $1,125,000
Automobiles and trucks:
Book value, 1/1/16 ($172,000 – 100,325) $71,675
11–62 Intermediate Accounting, 8/e
Problem 11–2 (concluded)
Leasehold improvements:
Book value, 1/1/16 ($216,000 – 108,000) $108,000
Problem 11–3
PELL CORPORATION
Depreciation
For the Year Ended December 31, 2016
Land improvements:
Cost $ 180,000
Straight-line rate (1 ÷ 15 years) x 6 2/3% $ 12,000
Building:
Machinery and Equipment:
Balance, 12/31/15 $1,158,000
Automobiles:
Book value on 12/31/15 ($150,000 – 112,000) $38,000
Problem 11–4
1. Depreciation for 2014 and 2015.
December 31, 2014
December 31, 2015
2. The year 2016 expenditure.
January 4, 2016
3. Depreciation for the year 2016.
December 31, 2016
Calculation of annual depreciation after the estimate change:
$ 48,000 Cost
Problem 11–5
(1) $65,000
Allocation in proportion to appraised values at date of exchange:
% of
Amount Total
Land $72,000 8
Problem 11–6
Requirement 1
Building:
$500,000
Requirement 2
(1)
June 29, 2017
Problem 11–6 (concluded)
(2)
June 29, 2017
Cash ……………………………………………………………………… 80,000
Requirement 3
Building:
Problem 11–7
Requirement 1
Cost of mineral mine:
Depletion:
Depreciation:
Structures:
11–68 Intermediate Accounting, 8/e
Problem 11–7 (continued)
Equipment:
$80,000 – 4,000
Depreciation per ton = = $.19 per ton
Requirement 2
Mineral mine:
Cost $ 2,200,000
Structures:
Cost $ 150,000
Equipment:
Cost $ 80,000
Less accumulated depreciation:
Problem 11–7 (concluded)
Requirement 3
Depletion of natural resources and depreciation of assets used in the extraction of
11–70 Intermediate Accounting, 8/e
Problem 11–8
Requirement 1
Calculation of goodwill:
Consideration exchanged $2,000,000
To record amortization of patent.
Problem 11–8 (concluded)
Requirement 2
Intangible assets:
11–72 Intermediate Accounting, 8/e
Problem 11–9
Requirement 1
Machine 101:
$70,000 – 7,000
Requirement 2
To record depreciation on machine 102 through date of sale.
March 31, 2016
Problem 11–9 (continued)
Loss on sale of machine 102:
Proceeds $52,500
Requirement 3
Building:
Useful life of the building:
$200,000
Problem 11–9 (concluded)
To record depreciation on the equipment.
Depreciation expense (determined below) …………………….. 15,775
Problem 11–10
a. This is a change in estimate.
No entry is needed to record the change.
2016 adjusting entry:
Calculation of annual depreciation after the estimate change:
$10,000,000 Cost
11–76 Intermediate Accounting, 8/e
Problem 11–10 (concluded)
b. This is a change in accounting principle that is accounted for as a change in
estimate.
Depreciation expense (below) …………………. 21,000
Accumulated depreciation ………… 21,000
SYD
2012 depreciation $ 60,000 ($330,000 x 10/55)
Problem 11–11
Requirement 1
Analysis:
Correct Incorrect
(Should Have Been Recorded) (As Recorded)
2014 Equipment 1,900,000 Equipment 2,000,000
Expense 100,000 Cash 2,000,000
Problem 11–11 (concluded)
Requirement 2
This is a change in accounting principle accounted for as a change in estimate.
No entry is needed to record the change.
2016 adjusting entry:
Depreciation expense (determined below)………………. 178,125
Problem 11–12
Requirement 1
Plant and equipment:
Depreciation to date:
Patent:
Amortization to date:
Requirement 2
Requirement 3
Goodwill should be tested for impairment on an annual basis and in between
Requirement 4
Plant and equipment:
An impairment loss is indicated because the book value of the assets, $105
11–80 Intermediate Accounting, 8/e
Problem 11–12 (concluded)
Goodwill:
An impairment loss is indicated because the book value of the assets of the
reporting unit, $470 million, is greater than the $450 million fair value of the reporting
unit. The amount of the impairment loss is determined as follows: