Plant Property Equipment

Question 1

How do you calculate the new depreciation expense after an asset has been impaired

Answer 1

Question 1

Lump sum allocation equation

Answer 1

Question 2

Rules for Depreciating Leasehold Improvements

Answer 2

Question 3

Steps for Calculating Straight-Line Depreciation

Answer 3

Question 4

What are the Interest Capitalization Rules for Asset Acquisitions

Answer 4

Question 5

What is the acquired cost of an equipment purchased with a noninterest bearing note?

Answer 5

Question 6

What are Double-Declining Balance (DDB) Depreciation Calculation Steps

Answer 6

Question 7

What are the general rules for impairment and asset restoration for long lived assets

Answer 7

Question 8

How to Calculate Depreciable Base?

Answer 8

Question 9

What are the Steps for Capitalizing Land Costs

Answer 9

Question 10

Where do you report Gains and Losses on the Sale of Depreciable Assets

Answer 10

Question 11

Depreciating Assets Purchased with a Noninterest-Bearing Note

Answer 11

Question 12

What are the Rules for Long-Lived Assets Held-for-Sale

Answer 12

Question 13

When can an impairment loss be restored for long-lived assets, and what limits apply to the restoration?

Answer 13

Question 14

How to calculate Gain or Loss on Disposal of Depreciable Assets

Answer 14

Question 15

What are the Steps for Impairment Testing of Fixed Assets

Answer 15

Question 16

Capitalized and Expensed Interest for Construction Projects

Answer 16

Question 17

Steps to record depletion expense

Answer 17

Question 17

Units of production depreciation method

Answer 17

Question 18

What are the costs to capitalizing Land vs Buildings

Answer 18

Question 19

What costs should be capitalized to prepare an asset for use?

Answer 19

Question 20

What are the steps to calculate depletion expense on the income statement

Answer 20

Question 21

What are the key steps for Capitalizing Interest on Self-Constructed Assets

Answer 21

Question 22

Capitalized Cost of Equipment with Noninterest-Bearing Note: Key Steps

Answer 22

Question 23

Costs to capitalize land key rules

Answer 23

Question 24

Donated Nonmonetary Assets: Key Rules for Nonreciprocal Transfers

Answer 24

Question 25

When should a company stop capitalizing interest costs on an asset under construction

Answer 25

Once the asset is ready for use, any subsequent interest costs should be expensed.

Question 26

Expenditures for repairs and maintenance are routine costs to keep the asset in normal working condition are _________

Answer 26

expensed, not capitalized. Oil changes and tire replacements are considered repairs and maintenance because they are expected costs to keep asset in normal working condition.

Question 27

What are the steps for Calculating Weighted-Average Interest Rate for Capitalized Interest

Answer 27

Question 28

How is an asset retirement handled under group depreciation, especially if insurance proceeds are received?

Answer 28

Question 29

How can you determine which depreciation method was used if an asset disposal resulted in a reported loss?

Answer 29

Question 30

When a company plans to dispose of long-lived assets, how should they be reported on the balance sheet at year-end if they have not been sold yet?

Answer 30

Report long-lived assets that are planned for disposal at the lower of:

Carrying amount or
Fair value less cost to sell

Question 31

How is an impairment loss measured for a long-lived asset still in use?

Answer 31

Impairment loss = Carrying amount - Fair value (no cost to sell).

Note: Cost to sell is not applicable for assets in use.

Question 32

What is the composite depreciation method, and how does it differ from other depreciation methods?

Answer 32

Question 33

What determines the fair value used for impairment assessment if both in-use and in-exchange values are provided?

Answer 33

When assessing fair value, select the higher of the in-use or in-exchange value, regardless of whether the asset is intended to remain in use or be disposed of. The higher value reflects the principle of “highest and best use” for the asset.

Question 34

What is the appropriate measurement basis for assets classified as “held for sale”?

Answer 34

For assets classified as “held for sale,” measure at the lower of carrying amount or net realizable value (NRV). NRV is calculated as the estimated selling price minus any costs of disposal. Depreciation is no longer applied once an asset is classified as held for sale, but impairment losses are allowed.

Question 35

How should the cash equivalent cost of an asset be calculated when using a noninterest-bearing note payable, and how is this amount used in depreciation calculations?

Answer 35

Question 36

How do you calculate Weighted Average Accumulated Expenditures (WAAE) for construction projects, and when do you use monthly fractions like 1/12 versus full-year weighting?

Answer 36

Question 37

How is depreciation calculated using the Sum-of-the-Years’-Digits method

Answer 37