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Question 1

how do you account for EI in periodic method?

Answer 1

EI * units LIFO/FIFO

disregards inv. sold

Question 2

what is included in inventoriable cost?

Answer 2

costs to get an inventory item to the state where it is ready to be sold

(mfg inv. = DL, RM, factory OH)

Question 3

how are insurance premiums accounted for in regards to inventory?

Answer 3

Included in inventory to the consignor because it got the goods to the sale location

Question 4

what is current cost?

Answer 4

another term for replacement cost

Question 5

what does topic 275 in FASB ASC “risk and uncertainties” cover?

Answer 5

disclosure

Question 6

what is included in land cost?

Answer 6

• all costs incurred up to excavation for new building
• PP, cost of razing, , broker’s fee, titles, recording, legal fees, razing, site dvp, draining, clearing brushes, assuming mortgages

Question 7

what is cap’d interest?

Answer 7

the smaller of total interest incurred or avoidable interest

• the amount of cap’d int for the avoidable int. is only up to average expend’s (excess expend * int rate)

Question 8

do you recognize a loss on uninsured fire damage when the amount is known?

Answer 8

yes, cap. the cost of refurbishing and record a loss in CY equal to CV of damaged portion of B

Question 9

what do you do with interest incurred during the construction period?

Answer 9

cap. the int. until it is completed.

* Once complete, all the int. costs are expensed

Question 10

what do you do with leasehold improvements?

Answer 10

they are cap’d and amort’d over the LESSER of life of improvement or remaining term of lease

Question 11

under IFRS, what happens when you have an IL with a previous reval. surplus?

Answer 11

you first reduce any reval surplus to 0 with further IL going to the IS

Question 12

under IFRS, what is the acct for individual FA’s being revalued?

Answer 12

if an indiv FA is reval’d, then the entire class of FA’s of the belonging asset must be reval’d.

*FA’s cannot be reval’d alone

Question 13

how do you calc. interest rate on “excess” expend’s? (WA)

Answer 13

ex: [6m/14m * 8%] = 3.43%
[8m/14m * 9%] = 5.14 %

WA interest rate = 3.43 + 5.14 = 8.57%

Question 14

when is int. cap’d?

Answer 14

only in connection w/ “discrete mfg. activity” (not int. to acq. land = exp’d)

Question 15

to get the price of a FA in a lump sum purchase, what do you do?

Answer 15

(FV FA/ total FV FA’s) * lump sum

*lump sum includes appraisal costs

Question 16

how are int. costs on construction projects cap’d?

Answer 16

based on WA accu’d expend’s, NOT amount borrowed (monthly int)

*although, cap. Normal debt up to WA

Question 17

how is freight and int. cost on a loan to finance a FA reported?

Answer 17

freight cost should be cap’d as part of PPE, and the int. cost to finance a purchase is immediately exp’d (both GAAP and IFRS)

Question 18

when should PPE begin depreciating?

Answer 18

on the installation date

Question 19

when should a liability be recorded in regards to FOB destination?

Answer 19

once the purchaser has legal title to the item being purchased

Question 20

should composition of FA be disclosed in summary of sig. AP’s?

Answer 20

no