The carrying amountcost minus accumulated depreciation) of property. plant, and equipment disposed of in Year 2 was
Answer(s): A
The cost of PPE disposed of is US $20, 000$295, 000 beginning PPE + 65, 000 acquisitions $340, 000 ending PPE). The accumulated depreciation + $30, 000 depreciation expense $119, 000 ending encountered depreciation. Thus, the carrying amount of PPE disposed of is US $7, 000'.I I Or II i depreciation). Balance sheets on December 31. Year 1. and December 31. Year 2, are presented below
Cash interest payments in Year 2 were
Answer(s): B
The interest payable credited in Year 1 was US $15, 000$20, 000 interest expense - $5, 000 amortized bond discount). Thus. the cash interest payment was US $12, 000$8, 000 beginning interest payable + $15, 000 interest payable credited in Year 1 - $11.000 ending interest payable).
In the determination of cost of goods sold, <List A> must be <List B> cash payments for goods along with other adjustments.
To convert from the cash basiscash payments) to the accrual basiscost of goods sold), an accounts payable must be added to cash payments for goods to determine net purchases. Net purchases is then adjusted for the change in inventory to determine cost of goods sold.
An entity has publicly announced a detailed, formal plan to dispose in its entirety of a component of the entity that represents a separate major line of business that is distinct operationally and financially. Which of the following is the proper treatment of the disclosures that should be made after the announcement?
A separate major line of business or geographical operating area that is distinct for operational and reporting purposes is a component of an entity. Thus, its disposal qualifies to be reported.
Which of the following is a unique reporting problem associated with the determination of the results of operations for an interim period?
Costs and expenses other than product costs should be either charged to income in interim periods as incurred or allocated among interim periods based upon the benefits received. Accordingly costs such as advertising should be deferred in an interim period if the benefits extend beyond that period; otherwise, they should expensed as incurred. But such a determination is difficult, and deferral raises the additional issue of how the deferred costs should be allocated among quarters. Thus, many entities expense the costs as incurred even though they may benefit other interim periods in the same annual period.
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