Solutions for Horngren's Accounting, Volume 1, 12th Canadian Edition by Miller-Nobles (All Chapters included)
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Course
Horngren\\\'s Accounting Volume 1 12ce Nobles
Institution
Thompson River University (TRU
)
Complete Solutions Manual for Horngren's Accounting, Volume 1, 12th Canadian Edition by Tracie L. Miller-Nobles, Brenda L. Mattison, Grant Mowbray, Carol A. Meissner, Jo-Ann L. Johnston ; ISBN13: 9780136889373...(Full Chapters included and organized in reverse order from Chapter 10 to 1)...1.Accoun...
Horngren's Accounting, Volume 1,
12th Canadian Edition by
Tracie L. Miller-Nobles
Complete Chapter Solutions Manual
are included (Ch 1 to 10)
** Immediate Download
** Swift Response
** All Chapters included
** Groups Projects and Solutions
** Excel file Solutions
,Table of Contents are given below
1.Accounting and the Business Environment
2.Recording Business Transactions
3.Measuring Business Income: The Adjusting Process
4.Completing the Accounting Cycle
5.Merchandising Operations
6.Accounting for Merchandise Inventory
7.Accounting Information Systems
8.Internal Control and Cash
9.Receivables
10.Property, Plant, and Equipment; and Goodwill and Intangible
Assets
,Solutions Manual organized in reverse order, with the last chapter displayed first, to ensure that all
chapters are included in this document. (Complete Chapters included Ch10-1)
Chapter 10
Property, Plant, and Equipment; and Goodwill
and Intangible Assets
Questions
1. The cost of all assets, including property, plant, and equipment, is the
purchase price, net of all discounts, plus sales taxes (but not GST or HST),
purchase commissions, and all other necessary amounts paid to acquire the
asset and ready it for its intended use. The cost of repairing the asset after it
is placed in service is debited to Expense, not to the Asset account.
2. The cost of removing the old building is debited to Land. The total cost of
the land is $1,115,000.
3. Under the relative-fair-value method, the cost of an individual asset acquired
in a lump-sum (or basket) purchase is based on the ratio of that asset’s
market value to the total market value of the combined assets. The ratio for
each asset is multiplied by the total purchase price to compute the cost of
each asset.
4. Capitalize means that an asset account was debited (increased) because the
company acquired an asset. Capitalized assets, except for land, are amortized
over their useful lives.
5. Amortization is a process of allocating the cost of a capital asset to expense
over the useful life of the asset. Amortization is not a process of valuation
based on appraised value. Amortization is not a fund of cash set aside to
replace a fully amortized asset. Useful life is the length of the service period
expected from an asset. It is an estimated amount of time or production.
6. Amortization expense applies to buildings, machinery and equipment,
furniture and fixtures, natural resources (minerals), and intangibles.
7. $ of Annual $ of Annual $ of Annual
Amortization Amortization Amortization
Time Time Time
Double-
Units-of-Production Declining-Balance Straight-Line
8. Accelerated amortization allocates most of the cost of a capital asset to the
early years of an asset’s life and lesser amounts toward the end. The double-
declining-balance method results in the most amortization in the first year of
an asset’s life. (This fact may be seen in the solution to question 7, above.)
9. The units-of-production method is most appropriate for amortizing the
school buses. Under this method, amortization arises only when the assets
are used. When business is slow, Orillia Schoolbus Co. records less
amortization than when business peaks. This pattern is consistent with the
matching principle.
10. The major causes of amortization are physical wear and tear from operation
and the elements, and obsolescence. Obsolescence seems more relevant to
Shania Data Centre’s computers. Changing technology causes Shania to
replace the computers before they are physically worn out.
11. Estimated residual value is not considered in computing amortization except
for the final year of an asset’s life by the double-declining-balance method.
12. Capital cost allowance is the term Canada Revenue Agency (CRA) uses to
describe amortization for tax purposes. The CRA specifies the maximum
capital cost allowance rate a taxpayer may use. Different classes of assets
have different capital cost allowance rates.
13. Amortization for less than a full year may be computed by multiplying an
annual amount by the appropriate fraction of the year for the straight-line and
double-declining-balance methods. The units-of-production method uses the
units consumed during the period, whether it’s a full year or a partial year. A
policy for amortization for less than a full month may be as follows: Record
a full month’s amortization if the asset is purchased on or before the 15th day
of the month, and record no amortization for the month if purchased after the
15th.
14. Amortization before the change in estimate: ($25,000 – $1,000)/6 × 2 =
$8,000. Remaining amortizable book value: $25,000 – $1,000 – $8,000 =
$16,000. New annual amortization: $16,000/7 = $2,286.
15. A company must record amortization up to the date of sale before accounting
for the sale of a property, plant, and equipment asset.
16. A company experiences a gain or loss on the exchange of one property,
plant, and equipment asset for another property, plant, and equipment asset
when the transaction has commercial substance. If the company receiving the
new asset experiences a significant change in the risk, timing, or amount of
the future cash flows from the asset exchange, there is commercial
substance. In this case, fair market value will be used to record the new asset,
and a gain or loss will be recognized on the old asset. Section 3831 of the
CPA Canada Handbook underlies this treatment.
17. Amortization, also called depletion, expense applies to natural resources.
Amortization is computed by the units-of-production method.
10-812
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