Question 1

Capitalization of borrowing costs During 2014, Tibet Building Company constructed various assets at a total cost of $4.2 million. The weighted-average accumulated expenditures on assets qualifying for capitalization of interest during 2014 were $2.8 million.The company had the following debts outstanding at December 31, 2014:  Instructions Calculate the amounts of the following for 2014 (show calculations): 
a)avoidable interest,
b)total interest to be capitalized.

Accepted Answer

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Question 2

Calculate depreciation and CCA Five identical vehicles which cost $500,000 (total)are acquired on April 1, 2014.Their estimated residual value is $20,000 and expected life is eight years.These assets are Class 10 with a maximum CCA rate of 30%.The company has a December 31 year end. Instructions Calculate the depreciation expense/CCA (to the nearest dollar)by each of the following methods:
a)Straight-line for 2014
b)Double declining-balance for 2015
c)Maximum Capital cost allowance for 2015

Accepted Answer

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Question 3

Calculate depreciation and CCA A machine costing $400,000 is acquired on October 1, 2014.Its estimated residual value is $40,000 and its expected life is eight years.The company has a calendar year end.The asset is a Class 8 asset with a maximum CCA rate of 20%. Instructions Calculate depreciation expense for 2014 and 2015 by each of the following methods:
a)Double declining-balance
b)Capital cost allowance

Accepted Answer

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Question 4

Impairment Assume the same information as in above, except for the following:  Instructions 
a)Calculate the recoverable amount.
b)Calculate the impairment loss.

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Question 5

Rational entity impairment model Cougar Corp.'s balance sheet includes the following asset:  After performing its annual review for impairment, Cougar obtains the following data:  Instructions Assuming Cougar uses the rational entity impairment model, 
a)Calculate the recoverable amount.
b)Calculate the impairment loss.
c)Prepare the entry to record the impairment loss.

Accepted Answer

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Quiz 1: Intermediate Accounting Volume 1

Impairment Assume the same information as in above, except for the following: Instructions a)Calculate the recoverable amount. b)Calculate the impairment loss.