Quiz Intermediate Accounting 1

UPH – KKBS - Materi UAS

Saturday, 18 Nov 2023

Soal 1
Merando Company acquired equipment on January 1, 2017, for €60,000. Merando elects to
value this class of equipment using revaluation accounting. This equipment is being
depreciated on a straight-line basis over its 6-year useful life. There is no residual value at
the end of the 6-year period. The appraised value of the equipment approximates the
carrying amount at December 31, 2017 and 2019. On December 31, 2018, the fair value of
the equipment is determined to be €35,000.

Instructions
(a) Prepare the journal entries for 2017 related to the equipment.
(b) Prepare the journal entries for 2018 related to the equipment.
(c) Determine the amount of depreciation expense that Merando will record on the
equipment in 2019.

Soal 2
On March 1, Mocl Co. began construction of a small building. The following expenditures
were incurred for construction:
March 1 € 75,000 April 1 € 74,000
May 1 180,000 June 1 270,000
July 1 100,000
The building was completed and occupied on July 1. To help pay for construction €50,000
was borrowed on March 1 on a 12%, three-year note payable. The only other debt
outstanding during the year was a €500,000, 10% note issued two years ago.

Instructions
(a) Calculate the weighted-average accumulated expenditures.
(b) Calculate avoidable interest.

Soal 3
A machine cost £80,000, has annual depreciation expense of £16,000, and has accumulated
depreciation of £40,000 on December 31, 2018. On April 1, 2019, when the machine has a
fair value of £32,000, it is exchanged for a similar machine with a fair value of £96,000 and
the proper amount of cash is paid. The exchange lacked commercial substance.

Instructions
Prepare all entries that are necessary at April 1, 2019.
Soal 4
Paige Candy Company offers a coffee mug as a premium for every ten 50-cent candy bar
wrappers presented by customers together with €1.00. The purchase price of each mug to
the company is €0.90 in addition it costs €0.60 to mail each mug. The results of the premium
plan for the years 2018 and 2019 are as follows (assume all purchases and sales are for
cash):
2018 2019
Coffee mugs purchased 720,000 800,000
Candy bars sold 5,600,000 6,750,000
Wrappers redeemed 2,800,000 4,200,000
2018 wrappers expected to be redeemed in 2019 2,000,000
2019 wrappers expected to be redeemed in 2020 2,700,000

Instructions
Prepare the general journal entries that should be made in 2018 and 2019 related to the
above plan by Paige Candy.

- Good Luck -