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
15.FALSE
1.A
2.A
3.B
4.C
5.C
6.A
7.B
8.B
9.A
Solution:
(1M x 95%(a) x 5 (b)/60 (c)) = 79,167 accumulated depreciation
(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:
Purchase price 9,000,000
Import duties 200,000
Cash discount not taken (100,000)
Freight costs 800,000
Testing costs 300,000
PV of dismantling costs (120,000 x PV of 1 @12%, n=20) 12,440
Initial measurement 10,212,440

2.A
3.C
4.A – Entity A will recognize the donation upon receipt as a debit to asset and a credit to liability.
5.C

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
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)
Kart Victor Lagustan10:28AM
11.B
Solution:
Depreciated replacement cost (see solution above) 367,500
Less: Restoration cost (10,000)
Value in use 357,500

Recoverable service amount (VIU - higher) 357,500

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 - higher) 350,000

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

13.D
14.C
15.D
B. (500,000 x 80% x 90% x 98%) + 10,000 + 100,000 + (20,000 x PVof 1 @10%,
n=10) =470,511
 10M/6motors= 1,666,667

6. B - 110,00 (95,000 + 15,000)

7. A. 10,000 (95,000 - 85,000)

(1M x 95%(a) x 4 (b)/60 (c)) = 63,333