Questions from Intermediate Accounting

Q: A building that was purchased on December 31, 2000, for

A building that was purchased on December 31, 2000, for $2,500,000 was originally estimated to have a life of 50 years with no salvage value at the end of that time. Depreciation has been recorded thr...

Q: Charlie Parker, president of Spinners Company, has recently noted that

Charlie Parker, president of Spinners Company, has recently noted that depreciation increases cash provided by operations and therefore depreciation is a good source of funds. Do you agree? Discuss.

Q: Andrea Torbert purchased a computer for $8,000 on July

Andrea Torbert purchased a computer for $8,000 on July 1, 2014. She intends to depreciate it over 4 years using the double-declining-balance method. Salvage value is $1,000. Compute depreciation for 2...

Q: Walkin Inc. is considering the write-down of its long

Walkin Inc. is considering the write-down of its long-term plant because of a lack of profitability. Explain to the management of Walkin how to determine whether a write-down is permitted.

Q: Toro Co. has equipment with a carrying amount of $700

Toro Co. has equipment with a carrying amount of $700,000. The expected future net cash flows from the equipment are $705,000, and its fair value is $590,000. The equipment is expected to be used in o...

Q: Explain how gains or losses on impaired assets should be reported in

Explain how gains or losses on impaired assets should be reported in income.

Q: It has been suggested that plant and equipment could be replaced more

It has been suggested that plant and equipment could be replaced more quickly if depreciation rates for income tax and accounting purposes were substantially increased. As a result, business operation...

Q: Neither depreciation on replacement cost nor depreciation adjusted for changes in the

Neither depreciation on replacement cost nor depreciation adjusted for changes in the purchasing power of the dollar has been recognized as generally accepted accounting principles for inclusion in th...

Q: Identify the factors that are relevant in determining the annual depreciation charge

Identify the factors that are relevant in determining the annual depreciation charge, and explain whether these factors are determined objectively or whether they are based on judgment.

Q: List (a) the similarities and (b) the differences

List (a) the similarities and (b) the differences in the accounting treatments of depreciation and cost depletion.