Questions from Intermediate Accounting

Q: On December 31, 2017, Convenient Cabs Incorporated was granted 10

On December 31, 2017, Convenient Cabs Incorporated was granted 10 taxi licences by the City of Somerdale, at a cost of $1,000 per licence. It is probable that Convenient Cabs will receive the expected...

Q: Coffee Time Limited has a trademark with a carrying amount of $

Coffee Time Limited has a trademark with a carrying amount of $83,750, and expected useful life of 15 years. As part of an impairment test on December 31, 2017, due to a change in customer tastes, Cof...

Q: On September 1, 2017, Pipeline Corporation acquired Tunneling Limited for

On September 1, 2017, Pipeline Corporation acquired Tunneling Limited for a cash payment of $954,000. At the time of purchase, Tunneling’s statement of financial position showed assets of $780,000, li...

Q: Shipper Inc. has acquired a large transport truck at a cost

Shipper Inc. has acquired a large transport truck at a cost of $90,000 (with no breakdown of the component parts). The truck’s estimated useful life is 10 years. At the end of the seventh year, the po...

Q: Access the Investor Perspectives article written by Steve Cooper, a member

Access the Investor Perspectives article written by Steve Cooper, a member of the IASB, in June 2015, entitled “A tale of ‘prudence’?” (www.ifrs.org). Mr. Cooper states that two different meanings hav...

Q: Brent Hill Company is constructing a building. Construction began on February

Brent Hill Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.5 million on March 1, $1.2 million on June 1, and $3 million on D...

Q: Turner Inc. began work on a $7,000,

Turner Inc. began work on a $7,000,000 non-cancellable contract in 2017 to construct an office building. During 2017, Turner Inc. incurred costs of $1,700,000, billed its customers for $1,200,000 (non...

Q: The following are independent situations that require professional judgement for determining when

The following are independent situations that require professional judgement for determining when to recognize revenue from the transactions. 1. Costco sells you a one-year membership with a single, o...

Q: Jupiter Company sells goods to Danone Inc. on account on January

Jupiter Company sells goods to Danone Inc. on account on January 1, 2017. The goods have a sales price of $610,000 (cost $500,000). The terms of the sale are net 30. If Danone pays within five days, i...

Q: Lots Lumber Limited is a private company that operates in the forestry

Lots Lumber Limited is a private company that operates in the forestry sector and owns timber lots. The company produces specialty lumber and sells to distributors and retailers. Currently, Lots uses...