Mentoring Ak

Selasa,
11 Desember 2012 [SPA MENTORING AK1 SELASA, 11 DESEMBER 2012]

Problem 1A: PPE Acquisition and Capitalization of Interest
A building was constructed on land purchased last year at a cost of $180,000. Construction began on
February 1, 2012 and was completed on November 1, 2012. The payments to the contractor were as
follows.
Date Payment
Feb 1 $120,000
June 1 360,000
Sept 1 480,000
Nov 1 100,000
To finance the construction of the building, a $600,000, 12% construction loan was taken out on
February 1, 2012. The loan was repaid on November 1, 2012. The firm had $200,000 of other
outstanding debt during the year at a borrowing rate of 8%.
Required: record the acquisition of the asset.
Problem 1B: Depreciation, Revaluation and Impairment
Wang Company purchased equipment on January 2, 2010, for $500,000; it has a 10-‐year useful life
with no residual value, SLM is used. Wang uses revaluation accounting and the following information
related to the equipment:
Date Fair Value

January 2, 2010 $500,000
December 31, 2010 468,000
December 31, 2011 380,000
December 31, 2012 355,000
Required:
(a) Prepare all entries related to the equipment for 2010.
(b) Determine the amounts to be reported at December 31, 2011 and 2012, as Equipment, Other
Comprehensive Income, Depreciation Expense, Impairment Loss, and Accumulated Other
Comprehensive Income.
(c) Prepare the entry for any revaluation adjustments at December 31, 2011 and 2012.
(d) Prepare the entries for the sale of the equipment on January 2, 2013, for $330,000.
Problem 2: Intangible Assets
Montana Matt’s Golf Inc. was formed on July 1, 2009, when Matt Magilke purchased the Old Master
Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans
to integrate the instruction business into his golf equipment and accesory stores. Magilke paid
$700,000 cash for Old Master. At the time Old Master’s financial position reported assets of
$650,000 and liabilities $200,000. The fair value of Old Master’s assets is estimated to be $800,000.
Included in the assets is the Old Master trade name with a fair value of $10,000 and a copyright on
some instructional books with a fair value of $24,000. The trade name has a remaining life of 5 years
and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 40 years.
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Selasa, 11 Desember 2012 [SPA MENTORING AK1 SELASA, 11 DESEMBER 2012]

Required:
(a) Prepare the intangible assets section of Montana Matt’s Golf Inc. at December 31, 2009. How
much amortization expense is included in Montana Matt’s income for the year ended December
31, 2009?
(b) Prepare the journal entry to record amortization expense for 2010.
(c) At the end of 2011, Magilke is evaluating the results of the instructional busniness. Due to fierce
competition from online and television, the Old master cash-‐generating unit has been losing
money. Its book value is now $500,000. The recoverable amount of the Old Master reporting
unit is $420,000. Magilke has collected the following information related to the company’s
intangible assets.
Intangible Asset Value-‐in-‐use
Trade name $3,000
Copyright 25,000

Prepare the journal entries required, if any, to record impairment on Montana Matt’s intangible
assets. (Assume that any amortization for 2011 has been recorded.)
Problem 3A: Investment Property
Melody Property Limited owns a right to use land together with a building from 2000 to 2046, and
the carrying amount of the property was $5 million with a revaluation surplus of $2 million at the
end of 2006. No revaluation was made in 2007. On 2 May 2008, when the fair value of the property
increased to %5.5 million, Melody signed a lease to rent out the property for rental purposes.
Discuss the accounting treatment for this transfer and suggest journal entries.
Problem 3B: Current Assets Held for Sale
Tony Manufacturing Group has a disposal group held for sale with the following details:
Goodwill 20,400
Property, plant, and equipment 58,000
Intangible assets 36,000
Inventory 2,400
Available-‐for sale financial assets 1,800
Investment property 16,980
Total
The investment property is measured by using fair value model, and its fair value is 15,000 at the
date of the disposal group being reclassified as held for sale under IFRS 5. Other assets have already
been remeasured in accordance with the applicable standards before the reclassification as held for
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sale. Property, plant, and equipment has carrying amount of 54,000 as remeasured immediately
before classification as held for sale. The fair value less cost to sell of the disposal group is 100,000.
Evaluate the financial implication of the reclassification of the disposal group as held for sale.
Problem 4: Current Liabilities
Described below are independent situations.
1. On August 1, the board of directors declared a $300,000 cash dividend that was payable on
September 10 to shareholders of record on August 31. Make all the necessary journal
entries.
2. Leppard Corporation sells DVD players. The corporation also offers its customers a 2-‐year
warranty contract. During 2010, Leppard sold 20,000 warranty contracts at $99 each. The
corporation spent $180,000 servicing warranties during 2010, and it estimates that an
additional $900,000 will be spent in the future to service the warranties. Prepare Lappard’s
journal for (a) the sale of contracts, (b) the cost of servicing the warranties, (c) the
recognition of warranty revenue.
To stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box.
Five coupons are redeemable for a premium consisting of children’s hand puppet. In 2011, the
company purchases 40,000 puppets at $1.5 each and sells 480,000 boxes of Alladin at $3.75 a box.
From its experience with other similar premium offers, the company estimates that 40% of the
coupons issued will be mailed back for redemption. During 2011, 115,000 coupons are presented for
redemption. Prepare the journal entries that should be recorded in 2011 relative to the premium
plan.
Problem 5: Pension Benefit
The accountant of PT DEF has developed the following information for the company’s defined-‐
benefit pension plan for 2011:
PV Defined Benefit Obligation-‐Jan 1, 2011 2200

FV Plan Asset-‐Jan 1, 2011 2100
Unrecognized Actuarial Gains-‐jan 1, 2011 252
Current year's data:
Service cost 30
Annual contribution to the plan 21
Past service cost (vested) 100
Past service cost (non vested) 15
Average period until vested 5
Expected remaining working lives of employee (years) 10
Benefits paid to retirees 31
Settlement rate 5%
Expected rate of return on plan assets 7%
PV Defined Benefit Obligation-‐Dec 31, 2011 2500
FV Plan Asset-‐Dec 31, 2011 2400
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The company uses the corridor approach for amortizing the Unrecognized Actuarial Gain or Loss
when it gets too large. In 2011 the company amends the defined benefit plan which results to an
increase in the defined benefit obligation.
Required:
(a) Using the above information for PT ABC, compute pension expense for 2011 and pension
liability in Statement of Financial Position as of December 31, 2011! Use pension worksheet
to support your calculations!
(b) Prepare the journal entries to reflect the accounting for the company’s pension plan for the
year ending December 31, 2011!
General Journal
2011
Pension Expense Cash BP YMHD
Beg. Balance
PSC-‐vested
PSC-‐non vested
Beg. Balance-‐adj.
Service costs
Interest costs
Expected return
Contributions
Benefits
Liabilities increase
Amort PSC-‐nonvested

Gain recognized

Memo
2011 Unamort.
DBO Nilai wajar aktiva PSC Unrecog. Gain/Loss
Beg. Balance
PSC-‐vested
PSC-‐non vested
Beg. Balance-‐adj.
Service costs
Interest costs
Expected return
Contributions
Benefits
Amort PSC-‐nonvested

Gain recognized

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JAWABAN:

Problem 1A: PPE Acquisition and Capitalization of Interest

Schedule of Weighted-‐Average Accumulated Expenditures
Date Amount Current Year Capitalization Period WAAE
February 1 120,000 9/12 90,000
June 1 360,000 5/12 150,000
September 1 480,000 2/12 80,000
November 1 100,000 0/12 0
1,060,000 320,000
Note that the capitalization is only 9 months in this exercise.
Avoidable Interest
WAAE X Interest Rate Avoidable Interest = Avoidable Interest
$320,000 X 12% = $38,400
Since the weighted-‐average expenditures are less than the amount of specific borrowing,
the specific borrowing rate is used.
Journal Entries
February 1
Building 120,000
Cash 120,000
Cash 600,000
Construction Loan 600,000
June 1
Building 360,000
Cash 360,000
September 1
Building 480,000
Cash 480,000
November 1
Building 100,000
Cash 100,000
November 1
Building 180,000
Cash 180,000
Construction Loan 600,000
Cash 600,000
Building 38,400
Interest expense 15,600
Cash (9/12*12%*600,000) 54,000
December 31
Interest expense (other debt) 16,000
Cash (8%*200,000) 16,000

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Problem 1B: Depreciation, Revaluation, and Impairment
(a) January 2, 2010
Equipment 500,000
Cash 500,000
December 31, 2010
Depreciation Expense (500,000 ÷ 10) 50,000
Accumulated Depreciation—Equipment 50,000
Equipment (500,000 – 468,000) 32,000
Unrealized Gain on Revaluation—Equipment18,000

(b) Dec. 31, 2011 Dec. 31, 2012
Equipment 380,000 315,000
Other Comprehensive Income (16,000) 2,500
Depreciation Expense 52,000 47,500
Impairment Loss 20,000 (20,000)
Accumulated Other Comprehensive
Income (0) 5,000

(c) December 31, 2011
Depreciation Expense (€468,000 ÷ 9) 52,000
Accumulated Other Comprehensive Income 2,000
Retained Earnings (€52,000 – €50,000) 2,000
Accumulated Depreciation 52,000
Unrealized Gain on Revaluation—Equipment16,000
Loss on Impairment (€400,000 – €380,000) 20,000
Equipment (€468,000 – €380,000) 88,000

(c) December 31, 2012
Depreciation Expense (€380,000 ÷ 8) 47,500
Retained Earnings (€50,000 – €47,500) 2,500 (or 20,000:8)
Recovery of Impairment Loss 17,500 (20,000-‐2,500)
Unrealized Gain on Revaluation 5,000
Equipment (€380,000 – €355,000) 25,000

(d) December 31, 2013
Cash 330,000
Loss on Disposal of Equipment 25,000
Equipment 355,000
Retained Earnings 5,000

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Problem 2: Intangible Assets
(a)
MONTANA MATT’S GOLF INC.
Intangibles Section of Statement of Financial Position
December 31, 2009
Trade name 10,000
Copyright (net accumulated amortization of £300) (Schedule 1 23,700
Goodwill (Schedule 2) 100,000
Total intangibles 203,700

Schedule 1 Computation of Value of Old Master Copyright
Cost of copyright at date of purchase 24,000
Amortization of Copyright for 2009 [(£24,000 ÷ 40) X 1/2 year] (300)
Cost of copyright at December 31 23,700
Schedule 2 Goodwill Measurement
Purchase price 700,000
Fair value of assets 800,000
Fair value of liabilities (200,000)
Fair value of net assets (600,000)
Value assigned to goodwill (700,000-‐600,000) 100,000
Amortization expense for 2009 is £300 (see Schedule 1). There is no amortization for the
goodwill or the trade name, both of which are considered indefinite life intangible assets.

(b) Copyright Amortization Expense 600
Copyright (£24,000 ÷ 40) 600
There is a full year of amortization on the Copyright. There is no amortization for the
goodwill or the trade name, which is considered an indefinite life intangible.

MONTANA MATT’S GOLF INC.
Intangibles Section of Statement of Financial Position
December 31, 2010
Trade name 10,000
Copyright (net accumulated amortization of £900) (Schedule 1) 23,100
Goodwill 100,000
Total intangibles 203,100

Schedule 1 Computation of Value of Old Master Copyright
Cost of Copyright at date of purchase 24,000
Amortization of Copyright for 2009, 2010 [(£24,000 ÷ 40) X 1.5 years] (900)
Cost of copyright at December 31 23,100

(c) Loss on Impairment 87,000
Goodwill 80,000*
Trade name (£10,000 – £3,000) 7,000

*Recoverable amount of Old Master reporting unit 420,000
Carry value of the reporting unit (500,000)
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Impairment 80,000
The Goodwill is considered impaired because the recoverable amount of the business unit
(£420,000) is less than its carrying value (£500,000). The copyright is not considered
impaired because the expected net future cash flows (£25,000) exceed the carrying amount
(£24,000).

Problem 3A: Investment Property
The property should have been accounted for by using the revaluation model in accordance
with IAS 16. It should be transferred from owner-‐occupied property to investment property
at the date of the lease commencement as there is change in use evidence by the lease
commnecement.
In accordance with IAS 40, Melody should apply IAS 16 on the property up to the date of
change in use and treat any difference at that date between its carrying amount under IAS
16 and its fair value in the same way as a revaluation under IAS 16.
In consequence, a revaluation surplus of $0.5 million should be further recognized. Total
revaluation reserves become $2.5 million ($2 million + $0.5 million). The reserves should be
frozen and accounted for in accordance with IAS 16 subsequently.
Entries:
Dr. Building and Land 500,000
Cr. Revaluation reserves 500,000
To recognize the additional revaluation surplus.
Dr. Investment property 5,500,000
Cr. Building and Land 5,500,000
To reclassify building and land to investment property

Problem 3B: Noncurrent Asset Held for Sale
allocated
CA as CA after
Initial CA impairment
remeasured allocation
loss

Goodwill 20.400 20.400 20.400 -‐

PPE 58.000 54.000 5.520 48.480

Intangible Asset 36.000 36.000 3.680 32.320

Inventory 2.400 2.400 2.400

AFS 1.800 1.800 1.800
Investment
property 16.980 15.000 15.000

Total 135.580 129.600 29.600 100.000

First, Tony is required to re-‐measure its investment property carried at fair value in
accordance with IAS 40. In other word, a loss of 1.980 (16.980-‐15.000) should be recognized
before the remeasurement in IFRS 5. Also, Tony should recognize a loss of 4.000 (58.000-‐
54.000) of inventory declining before classifying the disposal group as held for sale. As a
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result, the carrying amount of the disposal group is reduced to 129.600 (135.580-‐1.980-‐
4.000).
Then, this carrying amount is compared with the fair value less costs to sell of the disposal
group, and a further impairment loss of 29.600 (129.600-‐100.000) is identified.
The loss is first to reduce the carrying amount of goodwill (20.400) and then to reduce other
non-‐current assets in the group that are within the scope of the measurement of IFRS 5 pro
rata based on carrying amounts of thise assets. It implies that the loss should not be
allocated to Inventory, available-‐for-‐sale financial asset, and investment property, which are
not within the scope of the measurement requirements of IFRS 5. The remaining loss of
9.200 (29.600-‐10.400) is allocated between PPE and intangible assets pro rata on their
respective carrying amount.
PPE à 54.000/(54.000+36.000)*9.200=5.520
Intangible assets à36.000/(54.000+36.000)*9.200=3.680

Problem 4: Current Liabilities
No.1
August 1
Retained Earnings (Dividends Declared) 300,000
Dividends Payable 300,000
September 10
Dividends Payable 300,000
Cash 300,000
No.2
(a) Cash 1,980,000
Unearned Warranty Revenue(20,000 X $99) 1,980,000
(b) Warranty Expense 180,000
Cash, Inventory, etc. 180,000
(c) Unearned Warranty Revenue 330,000
Warranty Revenue ($1,980,000 X $180/$1,080*) 330,000
*$180,000 + $900,000
No.3
Inventory of Premium Puppets 60,000
Cash 60,000
(To record purchase of 40,000 puppets at €1.50 each)
Cash 1,800,000
Sales 1,800,000
(To record sales of 480,000 boxes at €3.75 each)
Premium Expense 34,500
Inventory of Premium Puppets 34,500
[To record redemption of 115,000 coupons. Computation: (115,000 ÷ 5) X €1.50 = €34,500]
Premium Expense 23,100
Premium Liability 23,100
[To record estimated liability for premium claims outstanding at December 31, 2011.]
Computation:
Total coupons issued in 2011 480,000
Total estimated redemptions (40% X 480,000) 192,000
Coupons redeemed in 2011 (115,000)
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Estimated future redemptions 77,000
Cost of estimated claims outstanding (77,000 ÷ 5) X €1.50 = €23,100
Problem 5: Pension Benefit
(a)
General Journal
2011
Pension Expense Cash BP YMHD
Beg. Balance 352 Cr
PSC-‐vested 100 Dr
PSC-‐non vested
Beg. Balance-‐adj. 100 Dr 352 Cr
Service costs 30 Dr
Interest costs 115,75 Dr
Expected return 147 Cr
Contributions 21 Cr
Benefits
Amort PSC-‐nonvested 3 Dr
2,05 Cr
Gain recognized 78,7 Cr
99,7 Dr 21 Cr 430,7 Cr

Memo
2011 Unamort.
DBO Nilai wajar aktiva PSC Unrecog. Gain/Loss
Beg. Balance 2200 Cr 2100 Dr 252 Cr
PSC-‐vested 100 Cr
PSC-‐non vested 15 Cr 15 Dr
Beg. Balance-‐adj. 2315 Cr 2100 Dr 15 Dr 252 Cr
Service costs 30 Cr
115,75
Interest costs (5%*2315) Cr
163 (310-‐
Expected return 310 Dr 147*) Cr
Contributions 21 Dr
Benefits 31 Dr 31 Cr
Liabilities increase 70,25 Cr 70,25 Dr
Amort PSC-‐nonvested 3 Cr
2,05 Dr
Gain recognized
2500 Cr 2400 Dr 12 Dr 342,7 Cr
XXX: residual value
*) 147=7%*2100
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Corridor test:
Unrecog. Gain/Loss Beg. 252
Limit of corridor 231,5*
Excess 20,5
Expected remaining lives 10
Gain Recognized 2,05
*) 10% x (the bigger of DBO (2315) or FV Planned Asset (2100))
(b) Journal

Pension Expense 99,7
Cash 21
Pension Liability 78,7

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Selasa,

Problem 1A: PPE Acquisition and Capitalization of Interest

Required: record the acquisition of the asset.

Problem 1B: Depreciation, Revaluation and Impairment

Date Fair Value

Problem 2: Intangible Assets

Problem 3A: Investment Property

Problem 3B: Current Assets Held for Sale

Property, plant, and equipment 58,000

Intangible assets 36,000

Available-‐for sale financial assets 1,800

Investment property 16,980

Problem 4: Current Liabilities

Described below are independent situations.

Problem 5: Pension Benefit

PV Defined Benefit Obligation-‐Jan 1, 2011 2200

Problem 5: Pension Benefit

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Mentoring Ak

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Mentoring Ak

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Selasa,

Problem 1A: PPE Acquisition and Capitalization of Interest

Required: record the acquisition of the asset.

Problem 1B: Depreciation, Revaluation and Impairment

Date Fair Value

Problem 2: Intangible Assets

Problem 3A: Investment Property

Problem 3B: Current Assets Held for Sale

Property, plant, and equipment 58,000

Intangible assets 36,000

Available-­‐for sale financial assets 1,800

Investment property 16,980

Problem 4: Current Liabilities

Described below are independent situations.

Problem 5: Pension Benefit

PV Defined Benefit Obligation-­‐Jan 1, 2011 2200

Problem 5: Pension Benefit

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Available-‐for sale financial assets 1,800

PV Defined Benefit Obligation-‐Jan 1, 2011 2200