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This Study Resource Was Shared Via: Property, Plant and Equipment

This document contains sample problems and solutions related to accounting for property, plant and equipment. Problem 10-1 contains true/false questions about accounting concepts. Problem 10-2 involves multiple choice questions calculating depreciation amounts. Problem 10-3 contains multiple choice questions about initial measurement and recognition of assets. Problem 10-4 discusses impairment testing and calculating impairment losses.

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Stefanie Fermin
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1K views4 pages

This Study Resource Was Shared Via: Property, Plant and Equipment

This document contains sample problems and solutions related to accounting for property, plant and equipment. Problem 10-1 contains true/false questions about accounting concepts. Problem 10-2 involves multiple choice questions calculating depreciation amounts. Problem 10-3 contains multiple choice questions about initial measurement and recognition of assets. Problem 10-4 discusses impairment testing and calculating impairment losses.

Uploaded by

Stefanie Fermin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 10

Property, Plant and Equipment

PROBLEM 10-1: TRUE OR FALSE


1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
6. FALSE
7. TRUE
8. FALSE - ₱3
9. TRUE
10. TRUE
11. TRUE
12. FALSE - ₱2, the carrying amount of the old part
replaced.
13. TRUE
14. TRUE
Co are rce y

15. FALSE
se ia s
sh u tud
ur d v wa

PROBLEM 10-2: MULTIPLE CHOICE


1. A
s

2. A
re is

3. B
4. C
Th

5. C
6. A
er
o

7. B
s

8. B
H

9. A
Solution:
(1M x 95%(a) x 5 (b)/60 (c)) = 79,167 accumulated
depreciation
This study source was downloaded by 100000784854321 from CourseHero.com on 10-23-2021
(1M – 79,167) = 920,833
(a)
(100% less 5% standard residual value)
(b)
(August to December 20x1)
(c)
(5 yrs. x 12)

10. D
11. A
12. B
13. D
14. C
15. D

PROBLEM 10-3: MULTIPLE CHOICE


1. A
Solution:
9,000,0
Purchase price
00
Import duties 200,000
(100,00
Cash discount not taken
0)
Freight costs 800,000
Testing costs 300,000
Co are rce y
PV of dismantling costs (120,000 x PV of 1
se ia s
@12%, n=20) 12,440
sh u tud
ur d v wa
10,212,
Initial measurement 440
s

2. A
3. C
re is

4. A – Entity A will recognize the donation upon receipt


as a debit to asset and a credit to liability.
Th

5. C
er
s o

This study source was downloaded by 100000784854321 from CourseHero.com on 10-23-2021


PROBLEM 10-4: FOR CLASSROOM DISCUSSION
1. D
2. D
3. B (500,000 x 80% x 90% x 98%) + 10,000 + 100,000
+ (20,000 x PV of 1 @10%, n=10) = 470,511

4. B
5. A

6. B (95,000 + 15,000) = 110,000

7. A 95,000 fair value of asset given up – 85,000


carrying amount = 10,000 gain

8. A

9. B
Solution:
(1M x 95%(a) x 4 (b)/60 (c)) = 63,333
(a)
(100% less 5% standard residual value)
(b)
(September to December 20x1)
(c)
(5 yrs. x 12)
Co are rce y
10. B
se ia s
Solution:
sh u tud
ur d v wa
Replacement cost 700,000
Accumulated depreciation - (700K x 95%
x 5/10) (332,500)
s

Depreciated Replacement Cost – Value in


use 367,500
re is

367,5
Th

Recoverable service amount (VIU - higher) 00


er

Carrying amount (400,000)


o

Impairment loss (32,500)


s

11. B
Solution:
This study source was downloaded by 100000784854321 from CourseHero.com on 10-23-2021
Depreciated replacement cost (see solution
above) 367,500
Less: Restoration cost (10,000)
Value in use 357,500

357,5
Recoverable service amount (VIU - higher) 00
Carrying amount (400,000)
Impairment loss (42,500)

12. C
Solution:
Depreciated replacement cost (see solution
above) 367,500
Multiply by: 90%
Value in use 330,750

Recoverable service amount (FVLCS - 350,0


higher) 00
Carrying amount (400,000)
Impairment loss (50,000)

13. D
Co are rce y
14. C
se ia s
15. D
sh u tud
ur d v wa
s
re is
Th

er
s o

This study source was downloaded by 100000784854321 from CourseHero.com on 10-23-2021


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