Ananayo, Cherie Lyn

Escocio, Clariz Angelika

Ong, Jessica
Tacyo, Vergel
Wandagan, Midran Bart

PROBLEM 28-8
Question 1: Answer: B
Percentage of Accumulated Depreciation
Building (3,750,000 / 15,000,000) 25%
Machinery (1,500,000 / 3,000,000) 50%

Useful Life
Building (10 years expired / 25%) 40 years
Machinery (10 years expired / 50%) 20 years

Sound Value Carrying Amount

Land 5,000,000 2,000,000

Building (75% * 25,000,000) 18,750,000 11,250,000
Machinery (50% * 5,000,000) 2,500,000 1,500,000

Question 2: Answer: B

Depreciation – building (18,750,000 / 30 years remaining) 625,000

Depreciation – machinery (2,500,000 / 10 years remaining) 250,000

Total depreciation for 2020 875,000

Question 3: Answer: B
Revaluation surplus - Jan. 01, 2020 11,500,000
Piecemeal realization in 2020:
Building (7,500,000 / 30) -250,000
Machinery (1,000,000 / 10) -100,000
Revaluation surplus – Dec. 31, 2020 11,150,000

PROBLEM 28-9
Question 1: Answer: A
Building

Original Cost Replacement Cost

450,000,000 600,000,000
 90,000,000 120,000,000
360,000,000 480,000,000

Land Original Cost Replacement Cost

50,000,000 65,000,000

Question 2: Answer: C
450,000,000/15 years 30,000,000 depreciation expense per year
75/30 = 12years + 0.5 year = 3 years
15-3 = 12 years of depreciable life
480,000,000/12 = 40,000,000

Question 3: Answer: A
Revaluation Surplus - June 30, 2020 135,000
Allocation of Revaluation (120,000,000/12) -10,000,000
Revaluation Surplus - Dec. 31, 2020 125,000,000

PROBLEM 28-10
Question 1: Answer: C
Cost – 6/30/20 5,000,000
Accumulated depreciation -1,500,000
Carrying amount – 6/30/20 3,500,000
Depreciation from July 1 to Dec. 31, 2020 (5,000,000 / 10 x
-250,000
6/12)
Carrying amount – 12/31/20 3,250,000

Fair Value – 12/31/20 4,550,000

Carrying amount – 12/31/20 3,250,000
Revaluation surplus – 12/31/20 1,300,000

Cost Replacement Cost

Equipment (4,550,000 / 65%) 5,000,000 7,000,000

Accumulated depreciation – 35% -1,750,000 -2,450,000
Depreciable amount 3,250,000 4,550,000

Journal Entry
Equipment 2,000,000
Accumulated depreciation 700,000
Revaluation surplus 1,300,000

Question 2: Answer: A
Depreciation for 2020 (5,000,000/10 500,000

Question 3: Answer: A
Depreciation for 2021 (4,550,000/5) 910,000

Question 4: Answer: B
Revaluation surplus – 12/31/20 1,300,000
Annual realization (1,300,000 / 5) -260,000
Revaluation surplus – 12/31/21 1,040,000

Problem 29-11
1. D
2. B
3. D
4. C
5. A

CHAPTER 30:
Problem 30-13 Answer: C
Cost – 1/1/17 800,000

Accumulated depreciation – 12/31/19 (100,000 x 3) -300,000

Carrying amount – 12/31/19 500,000

Recoverable amount -200,000
Impairment loss 300,000

Impairment loss 300,000

Accumulated depreciation 300,000

Cost 800,000

Accumulated depreciation (300,000 + 300,000) -600,000

Recoverable amount – 1/1/20 200,000

Depreciation for 2020 (200,000 / 5) -40,000
Carrying amount – 12/31/20 160,000

Problem 30-14 Answer: B

Cost 3,200,000
Accumulated depreciation – 5/31/20 (3,200,000 – 500,000 x
-1,485,000
33/60)
Carrying amount – 5/31/20 1,715,000
Fair value less cost of disposal -1,350,000
Impairment loss 365,000
 Remaining Life
Machine (60 months – 33 months) 27 months

Depreciation for the month of June 2020 (1,350,000 / 27

50,000
months)

Problem 30-15 Answer: B

Cost – 1/1/16 1,000,000

Accumulated depreciation – 12/31/19 (900,000 / 10 x 4) -360,000

Carrying amount – 12/31/19 640,000

Depreciation for 2020 (640,000 – 40,000 / 4) -150,000
Carrying amount – 12/31/20 490,000

Problem 30-16 Answer: C

Cost – 1/1/20 2,400,000
Depreciation for 2020 (1,600,000 / 4) -400,000
Carrying amount – 12/31/20 2,000,000
Sale price-recoverable amount -650,000
Impairment loss 1,350,000

Problem 30-17
Question 1: Answer: A
Cost – 1/1/20 11,000,000
Accumulated depreciation (11,000,000 / 10) -1,100,000
Carrying amount – 12/31/20 9,900,00
Value in use – higher than fair value -8,550,000
Impairment loss for 2020 1,350,000

Question 2: Answer: B
Carrying amount – 1/1/20 8,550,000
Depreciation for 2021 (8,550,000 / 9) -950,000
Carrying amount – 12/31/21 with impairment 7,600,000

Cost – 1/1/20 11,000,000

Accumulated depreciation – 12/31/21 (11,000,000 / 10 x 2) -2,200,000

Maximum carrying amount – 12/31/21 no impairment 8,800,000

Fair value less cost of disposal – 12/31/21 higher than value

8,400,000
in use
Carrying amount – 12/31/21 with impairment -7,600,000
Gain on reversal of impairment for 2021 800,000

Question 3: Answer: A
Depreciation for 2022 (8,400,000 / 8) 1,050,000

Problem 30-18 Answer: D

Impairment loss (450,000 – 428,000) 22,000

Problem 30-19 Answer: B

Cost – 1/1/17 5,600,000
Accumulated depreciation – 8/31/20 (4,800,000 / 96 months
-2,200,000
x 44)
Carrying amount – 8/31/20 3,400,000

Useful life (8 years x 12 months) 96 months

Value in use 3,500,000

Fair value 3,000,000
Recoverable amount 3,500,000

Problem 30-20
Question 1: Answer: C
Initial recorded value of hood will for retailing 300,000
Implied value of good will for retailing -250,000
Impairement Loss 50,000

Question 2: Answer: B
Initial recorded value of hood will for service 200,000
Implied value of good will for service -100,000
Impairement Loss 100,000

Question 2: Answer: D
Carrying
Implied value
amount
Retailing 300,000 250,000
Service 200,000 100,000
Financing 400,000 600,000
Total impairment loss

Problem 30-21 Answer: A

Telecommunication 2,500,000

Segment carrying amount including goodwill 2,900,000

Estimated total fair value of segment -
Impairment loss

Networking

Segment carrying amount including goodwill 3,000,000

Estimated total fair value of segment -2,800,000

Impairment loss- all allocated to goodwill 200,000

Goodwill 500,000
Impairment loss -200,000
Carrying amount of goodwill 300,000

Problem 30-22 Answer: C

Carrying amount – 12/31/20 7,000,000
Depreciation for 2021 (20%) -1,400,000
Carrying amount – 12/31/21 5,600,000

Carrying amount – 12/31/21 (assuming no impairment) 7,200,000

Reversal of impairment loss 1,600,000

Problem 30-23
1. B
2. C
3. A
4. A
5. B
6. B
7. A
8. D
9. D
10. B
 Revaluation
Surplus
(01/01/2020)
3,000,000
7,500,000
1,000,000
11,500,000

Increase
150,000,000
 30,000,000
120,000,000

Increase
15,000,000
135,000,000

tion expense per year

Appreciation

2,000,000
-700,000
1,300,000
Loss

50,000
100,000
-
150,000