ACY3002 2020-21 S2 Test Quick Solutions

Question 1

A. The interest cost to be capitalized is $24,352.5 (the avoidable interest), which is lower
than the actual interest of $84,000.

B. Dec 31, 2020

Depreciation Expense $6,320
Accumulated Depreciation – Computers $6,320

Accumulated Depreciation - Computers $6,320

Tablets/Equipment - new $33,000
Loss of Disposal of Computers $280
Cash $8,000
Computers/Equipment - old $31,600

Question 2

A. Carrying amount...................... 320,000

Recoverable amount.....................(315,000)
Loss on impairment.................. $ 5,000

B. January 1, 2019
Equipment $600,000
Cash $600,000

December 31, 2019

Depreciation Expense - Equipment $40,000
Accumulated Depreciation – Equipment 40,000

Accumulated Depreciation – Equipment $40,000

Unrealized Gain on Revaluation - Equipment $14,000
Equipment $26,000

December 31, 2020

Depreciation Expense - Equipment $41,000
Accumulated Depreciation – Equipment $41,000

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 Question 3

(a) $180,000 should all be expensed.

(b) The patent has a cost of $162,000 and should be amortized at $16,200 per year.

(c) $ 567,953.

(d) January 1, 2020

Cash $567,953
Bonds Payable $567,953

(e) Cash Interest Premium Carrying

Date
Paid Expense Amortized Amount
1/1/2020 $ 567,953
6/30/2020 $ 25,000 $ 22,718 $ 2,282 565,671
12/31/2020 25,000 22,627 2,373 563,298

(f) June 30, 2020

Interest Expense $22,718
Bonds Payable $2,282
Cash $25,000

This study source was downloaded by 100000881253794 from CourseHero.com on 02-21-2024 08:26:58 GMT -06:00

https://www.coursehero.com/file/116254468/ACY3002-2021-S2-Test-Solutions-for-Studentspdf/
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