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会计代写-MGAB02
时间：2022-02-17
MGAB02 Midterm Review: Pt1
UTSC 导师：JY
1
MGAB02
Introduction to Financial Accounting II
Agenda:
1. 考试安排
2. Chapter 8
3. Chap 9
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MGAB02 Midterm Review: Pt1
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MGAB02: Introduction to Financial Accounting II 初阶财务会计 2
Package Content:
Chap 8：
Financial Statements and Business Decision
P3-17
Chap 9:
Investing and Financial Decision and the Statement of
Financial Statements
P17-19
REVIEW SCHEDULE
线上课（多伦多时间） 中国时间
Part 1： 2 月 13 日, 21:00 – 24:00 2 月 14 日 10:00 – 1:00
Part 2: 2 月 15 日, 20:00 – 23:00 2 月 16 日 9:00 – 12:00
EXAM SCHEDULE
Time:
多伦多时间: 2 月 18 日 15:00 – 17:00 北京时间: 2 月 19 日 4:00 – 6:00
Room：Examplify(Examsoft)
Exam Format：
- 选择题： 12-15 道题
- Short Answer (60%) 3 道大题
✓ Bond
✓ Long-term Asset
Kong：
- 支持 both 在 exemplify的 textbox里打字完成 or 手写，但是一定要决定你用哪种形式（打字 or
手写）
✓ 如果是打字的，需要在 textbox里打完整的所有的过程，不写过程不给分
✓ 如果是手写的，需要有一个 cover page（封面），with你的名字，学号&lec #
Lisa:
- Official里目前只支持打字
✓ 如果是打字的，需要在 textbox里打完整的所有的过程，不写过程不给分
✓ 但我也发 email问过能否手写，她说如果我额外需要也可以（我在问她能不能在 quercus
开个 tab给大家）
考试技巧：
先做大题（1hr 10-20min）！再做选择题！(30-40min)
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Chap 8: Reporting and Interpreting Long-Lived Asset，PPE, Natural
Resources and Intangible
1. DEFINITION AND PROPERTY, PLANT AND EQUIPMENT (PPE)
Two Condition:
1. Actively used in operations (Expected to benefit future over than ____ year)
能够帮公司赚取 revenue，可以是你的库存，也可以是提供 service 所需要的 asset
2. If land and equipment are on hold, not__________ ____________, consider as investment (not PPE)
Two types：
Tangible(可触摸的资产): Physical Substance
✓ Land ---- non-____________ asset
✓ Building and Equipment --- Depreciation
✓ Natural Resource(Timber 木材) --- Depletion（Depletion 就是 Nature Resource 的 Depreciation）
Intangible（不可触摸的资产）: No Physical Substance
Value represented by rights that produce benefits
eg: Copyright, Trademarks, Goodwill(名誉，商誉)
2. ACQUISITION COST(购置成本)
Building:
• Architectural Fees/ Permit
• Construction/ Evaluation Costs
• Interest Costs during Construction
• Removable of old Building--- included in land
Equipment:
• Purchase Price, including taxes
• Installation/testing costs
• Modification to building
• Transportation Cost(FOB Shipping)
Land:
• Legal fees, accrued/Delinquent Taxes(滞纳税
款)
• Real estate commissions
• Title insurance premiums
• Surveying fees, cleaning, grading, draining
• Title search and transfer fees
Land Improvement:
• Fences, parking lot surface and outside lighting
are recorded separately from land
• Improvement have limited life
** 这个表格仅供参考
注意：
1. Basket Purchase 的话 cost 是按比例分，不遵循上面的表格
2. 判断的准则：是否影响使用
3. 人为因素和常规维修都不算做 asset cost，算作_________
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1. Airbury Company acquired manufacturing equipment at an invoice price of $80,000 and paid $750
to have it delivered to the factory. $400 was spent to repair a door that was damaged while installing
the equipment. At what amount should this equipment be recorded on the company's books?
A) $81,150 B) $80,400 C) $80,750 D) $80,000
3. BASKET PURCHASE 打包购买
➢ 所有物品加起来得到一个总价格进行购买，不知道每个物品单独的价格，需要________
WestJet purchased a land, building and equipment, paying a total of $600,000. Market values for the
assets were not available, but appraised values were 200,000 for land, 500,000 for building and 180,000
for equipment. What’s more, there are legal cost 10,000, regrading of land cost 20,000 and revamp cost
for equipment is 15,000.
Appraised Value % of Value Assigned
Cost
Additional Total
Land
Building
Equipment
Total
Prepare Journal Entry:
1. Belmont Corporation made a basket purchase of land, a building and equipment, paying a total of
$1,500,000. Market values for the assets were not available, but the appraised values were $300,000
for the land, $900,000 for the building, and $600,000 for equipment. What amounts should be
recorded in the Land, Building, and Equipment accounts, respectively?
A) $250,000, $750,000, and $500,000 B) $1,500,000, $-0-, and $-0-
C) $300,000, $900,000, and $600,000 D) $500,000, $500,000, and $500,000
2. Johnson Company acquires land and building for $4,000,000 including all fees related to acquisition.
The land is appraised at $2,700,000 and the building at $2,100,000. The building is then renovated at
a cost of $750,000. What amount is capitalized to the building account?
A) $2,078,125 B) $4,000,000 C) $2,375,000 D) $2,500,000
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4. 3 METHOD TO CALCULATE DEPRECIATION(计算贬值的 3 种方法)
1. Straight-line (Assets used Evenly) --- 按照使用的年份来计算
Formula: =
−
#
=
2. Units-of-Production (Assets used based on the Output) --- 按照生产的个数来计算
Formula: =
−
=
= × # ________
3. Double Declining Balance (Assets value decline more up front) --- 按倍数进行减少
第一种：
Formula: = ( − ) ×
2
#
第二种：题目会说是 50% acceleration rate declining，如果是这样的话
Formula: = ( − ) ×
例题 SLIDES
WestJet purchase an equipment for $10,000, estimated useful life for 5 years, residual value is 1000.
1. Use straight line method to calculate the first year depreciation expense
2. If the equipment estimated can produce 10,000 units, and they produced 2000 units in first year,
can you calculate the depreciation expense
3. Use Double Declining method to calculate the first year depreciation expense
Which of the following is not a factor affecting the calculation of straight-line depreciation?
A) Useful life. B) Carrying amount. C) Residual value. D) Cost.
Nadler Inc. purchased equipment for $48,000, and estimated that the equipment will have a $4,000
residual value at the end of its 8-year useful life. Using the double-declining-balance method, the
depreciation expense for the third year would be
A) $6,750
B) $6,188
C) $5,500
D) $9,000
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5. CHANGES IN AMORTIZATION ESTIMATES(贬值发生改变)
Possible Changes:
1. _____________
2. _____________
3. _____________
Formula: =
(+∆− ) −
(+ ∆ − )
Angstrom Corporation purchased a truck at a cost of $60,000. It has an estimated useful life of five years
and estimated residual value of $5,000. At the beginning of year three, Angstrom's managers concluded
that the total useful life would be four years, rather than five. There was no change in the estimated
residual value. What is the amount of depreciation that Angstrom should record for year 3 under the
straight-line method?
A) $15,500 B) $11,000 C) $16,500 D) $8,250
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例题 SAMPLE MIDTERM Q2
On July 1, 2019, Gero Corp. purchased a factory, including land, building, and machines for $2,500,000
from Millan Inc. In addition, Gero paid in cash 2% of the cost for taxes, $34,000 in legal fees and
commissions, $152,000 for building renovation, and $42,000 to refurbish the machines. In making
payment to Millan, Gero issued 20,000 ordinary shares at $50 per share, signed a $1,300,000, 4% note
payable due June 30, 2021, with interest paid annually on the anniversary date, and the remaining balance
will be paid to Millan on September 1, 2019. Millan provides a 2% discount for payments made within 30
days. Gero’s year-end date is December 31.
Gero applies straight-line depreciation method on its capital assets. It estimated that the building would
last 20 years with a residual value of $100,000, and machines 7 years with a residual value of $20,000.
Required:
2019
1. Calculate the purchase cost of each capital asset, assuming the appraisal value shows that land is
worth 30%, building 60% and machines 10%.
2. Record the journal entries required related to the capital assets for 2019.
2020:
On October 2, Gero renovated the receiving area and paid $420,000. As a result the estimated residual
value increased by $50,000 and the useful life by 3.25 years. Due to water contamination by the
neighboring factory, on December 31, Gero did an impairment test on Land. The amount of value in use
was $450,000, and the fair value was $300,000.
3. Record all journal entries for 2020.
2021:
On April 1, Gero replaced the old machines by selling them for $150,000.
Record the disposal of the machines.
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例题 SAMPLE MIDTERM Q1
Grindstone Corp. (Grindstone) produces fad toys for children. In 2014, Grindstone purchased a new
stamping machine to produce the latest fad toy. The machine cost $100,000 plus taxes of $13,000, and
delivery and installation of $12,000. Grindstone's management estimates that the market for the toy is
about 600,000 units and demand will last no more than three years. Management expects that it will be
able to produce and sell 320,000 units in 2014, 210,000 units in 2015, and 70,000 units in 2016. Once the
fad dies, the machine won't be useful for any purpose and will have to be sold for scrap, about $4,000.
Grindstone will use unit-of-production depreciation for the machine.
Required:
1. Prepare the journal entry to record the purchase of the new machine.
2. Prepare a depreciation schedule showing the depreciation expense for each year and the carrying
amount of the machine at the end of each year.
3. Suppose that at the end of 2015, Grindstone's management realized the fad had died more quickly
than expected and there was no more demand for the toy. Prepare the journal entry to record the
sale and any other journal entries required with respect to the machine in 2015. Assume that
Grindstone produced and sold 75,000 units in 2015 and received $2,000 from a scrap dealer for
the machine.
4. Repeat Requirements (2-3) assuming that Grindstone will use straight-line depreciation for the
machine.
5. Repeat Requirements (2-3) assuming that Grindstone will use declining balance depreciation at a
rate of 50 percent for the machine. Evaluate the appropriateness of the rate Grindstone will use to
depreciate the machine.
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例题 SAMPLE MIDTREM Q3
Arnison Corp. purchased land and a building on May 1, 2011 for $ 385,000. The company paid
$ 115,000 in cash and signed a 5% note payable for the balance. The note is due on February 1,
2013. At that time, Arnison estimated that the land was worth $ 150,000 and the building
$ 235,000. The building was estimated to have a 25-year useful life with a $ 35,000 residual
value, The company has a December 31 year end and uses the single declining balance
depreciation. The following are related transactions and adjustments during the next three years:
2011：
Dec 31 Record the annual depreciation.
Paid the interest owning on the notes payable.
2012：
Feb 17 Paid 225 to have the furnace cleaned and serviced
Dec 31 Recorded the annual depreciation.
Paid the interest owing on the note payable.
The land and building were tested for impairment. The land had a net realizable value
amount of $ 120,000 and the value in use of $ 110,000. The building has a net realizable
value of $ 220,000 and a value in use of $ 240,000.
2013:
Jan 31 Sold the land and building for $ 320,000 cash - $ 110,000 for the land and $ 210,000 for
the building.
Feb 1 Paid the note payable and interest owing.
Required:
1. Record the above transactions and adjustments.
2. What factors may have been responsible for the impairment.
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例题 SAMPLE MIDTERM Q2
In January 2015, Bath Inc. (Bath) purchased an office building on a one hectare piece of land in
Saskatoon for $6,000,000. An appraiser valued the land at $1,375,000. The building is eight
years old and Bath's management expects it to last for another 12 years, after which time it will
have to be demolished. Management has decided to use straight-line depreciation.
Required:
Prepare the journal entries that Bath would make to record the purchase of the land and building.
What entry would be made to record the depreciation expense for the year ended December 31,
2015?
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6. INTANGIBLE ASSETS 无实物资产
特性：
Non-current Assets without Physical Substance --- 没有实体物品
Often provide exclusive rights or privileges --- 一般来说是权利或者特权
Useful life is often difficult to determine --- 使用的时长很难判断
Usually acquired for operational use --- 一般都是运营上使用的
Except for Goodwill, most intangible assets are proved by a legal document. --- 一般都是一些法律
文件
➢ Definite Life(有限时长): Use ___________________ Method
1. ___________________________商标
2. ___________________________专利
3. ___________________________版权
4. ___________________________经销权
5. Leasehold Improvements 租赁物件改良.
➢ Indefinite Life(无限时长): Not ________________
______________
1. Occurs when _______________________
2. Only purchase goodwill is an __________________________
3. Is not ________________
4. _____________________________ Every year
1. Which of the following is an example of an intangible with an indefinite life?
A) The goodwill value resulting from a business combination.
B) The research costs to develop a new drug.
C) A patent on a new invention.
D) A copyright on a book of poetry.
2. Depletion is recorded for which of the following
A) Intangible assets B) Land and buildings
C) Natural resources. D) Uncollectible trade receivables.
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CHAP 8 大题总结
1. 购买当天 --- Acquisition cost --- 主要考点 Basket Purchase
2. 使用过程中 --- Depreciation
Straight-line _________________________________
Unit of Production___________________________,
_________________
Double Declining _______________________________
*** Change in amortization _____________________________________
需要注意的点：
3. 最后卖的时候
a) 先计算本年的 Depreciation
b) 计算目前 Asset 的 Carrying Value
c) 算 Gain or Loss
d) Journal Entry
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Chap 9: Reporting and Interpreting Current Liability
1. LIABILITY, CURRENT LIABILITY
Liability 的定义:
✓ _______ future sacrifices of economic benefits
注意： 不一定是 sacrifice cash，还可以是_______
✓ Constitute a present obligation resulting from ________ transaction or event
✓ Measured at their current cash equivalent at the time incurred
Current Liability 的定义:
✓ One that is due or payable within the _______ operating cycle or the _____ fiscal year.
2. KNOW LIABILITY & ESTIMATE LIABILITY
Liability 除了我们平常学习的按时间分类以外，还有另一种分类方式，就是能否 determine 这个
liability 的价值
Known Liabilities(可以确定它的价值的负债):
✓ Account Payable
✓ Wages Payable
✓ Unearned Revenue
✓ Payroll Payable
o Payroll Expense(薪资支出):
Employee Employer
Employee Insurance(EI) :
失业保险，员工和公司都需要付 ____________ ___________
Canada Pension Plan(CPP)：
养老金，员工和公司都需要付 _____________ ____________
Income Tax: 个人所得税，只有员工要付
………
Estimate Liabilities(无法确定价值，只能通过预估)
✓ Income Taxes Payable
✓ Warranty Liabilities
o Record the estimated warranty(卖出去的时候):
Warranty expense（SE） 460
Est. Warranty Liability 460
o Record when repair work(产生服务的时候)
Warranty Liability 300
Cash 300
✓ Frequent Flyer
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3. PROVISION & CONTINGENT LIABILITIES
Provision Liability（预计负债）:
✓ A present obligation exists
✓ It is probable that outflow of resources is required
✓ The amount of obligation can be reasonably ___________
有较大可能性会发生的债务，不知道何时发生，但是可以衡量金额，一般记作 long-term Liability
Contingent Liabilities (或有债务)
• A contingent liability is a _______ liability that is created as a result of a _____ event; it is not an
effective liability until some future event occurs
还未发生但是有可能会发生的债务状况，一般只写在附注
E.g： Law Sue
Likely Unlikely Not Determinable
Yes
No
4. 可能会考的 RATIO
⚫ Current Ratio =
Measure the ability of the company to pay current debt as they become due
公司偿还短期债务的能力
⚫ Quick Ratio =
Quick Asset = Cash, net account receivable, note receivable, and short-term investment
Measure ability to pay its current debts quickly
衡量公司偿还短期债务的速度
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1. A contingent liability is recorded in the accounting records
A) if a reasonable estimate of the expected loss can be determined and if it is probable.
B) if it will possibly become an actual liability, and the exact amount is unknown.
C) under no circumstances.
D) if the contingency has not already been disclosed in the notes to the financial statements.
2. Which of the following is correct with respect to a contingent liability that is "reasonably possible"
but "cannot reasonably be estimated"?
A) It must only be disclosed as a note to the financial statements.
B) It must be recorded and reported as a liability.
C) It does not need to be recorded or reported as a liability.
D) It must be reported as a liability, but not recorded.
1. Big Top Electronics Inc. offers a two-year warranty on its products. The estimated liability
is 4% of sales in the year of sale and 6% in the second year. Sales for 20X0 and 20X1 were:
$2,500,000 and $2,800,000, respectively. They incurred no warranty costs in 20X0 but in
20X1 they spent $175,000 on repairs related to the warranties from 20X0 and 20X1.
1. Big Top's warranty liability at the year-end 20X0 is
A) $250,000 B) $150,000 C) $100,000 D) $0
2. Big Top's warranty expense for 20X0 is
A) $80,000 B) $100,000 C) $250,000 D) $150,000
3. Big Top's warranty liability as at the end of the 20X1 year is
A) $380,000 B) $280,000 C) $75,000 D) $355,000
2. Site Company had the following account balances related to payroll at the end of the period:
CPP payable --- employees’ share 7,000
Liability for income taxes withheld 20,000
Salary and wage expense 95,000
Without considering any employer payroll taxes, Site would record Salaries Payable for the pay period
amounting to which of the following?
A) $75,000 B) $61,000 C) $68,000 D) $95,000
3. An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36,
and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi-
weekly basis?
A) $1,597 B) $1,782 C) $1,732 D ) $2,000
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MGAB02
Introduction to Financial Accounting II
Agenda:
1. 考试安排
2. Chapter 8
3. Chap 9
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MGAB02: Introduction to Financial Accounting II 初阶财务会计 2
Package Content:
Chap 8：
Financial Statements and Business Decision
P3-17
Chap 9:
Investing and Financial Decision and the Statement of
Financial Statements
P17-19
REVIEW SCHEDULE
线上课（多伦多时间） 中国时间
Part 1： 2 月 13 日, 21:00 – 24:00 2 月 14 日 10:00 – 1:00
Part 2: 2 月 15 日, 20:00 – 23:00 2 月 16 日 9:00 – 12:00
EXAM SCHEDULE
Time:
多伦多时间: 2 月 18 日 15:00 – 17:00 北京时间: 2 月 19 日 4:00 – 6:00
Room：Examplify(Examsoft)
Exam Format：
- 选择题： 12-15 道题
- Short Answer (60%) 3 道大题
✓ Bond
✓ Long-term Asset
Kong：
- 支持 both 在 exemplify的 textbox里打字完成 or 手写，但是一定要决定你用哪种形式（打字 or
手写）
✓ 如果是打字的，需要在 textbox里打完整的所有的过程，不写过程不给分
✓ 如果是手写的，需要有一个 cover page（封面），with你的名字，学号&lec #
Lisa:
- Official里目前只支持打字
✓ 如果是打字的，需要在 textbox里打完整的所有的过程，不写过程不给分
✓ 但我也发 email问过能否手写，她说如果我额外需要也可以（我在问她能不能在 quercus
开个 tab给大家）
考试技巧：
先做大题（1hr 10-20min）！再做选择题！(30-40min)
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Chap 8: Reporting and Interpreting Long-Lived Asset，PPE, Natural
Resources and Intangible
1. DEFINITION AND PROPERTY, PLANT AND EQUIPMENT (PPE)
Two Condition:
1. Actively used in operations (Expected to benefit future over than ____ year)
能够帮公司赚取 revenue，可以是你的库存，也可以是提供 service 所需要的 asset
2. If land and equipment are on hold, not__________ ____________, consider as investment (not PPE)
Two types：
Tangible(可触摸的资产): Physical Substance
✓ Land ---- non-____________ asset
✓ Building and Equipment --- Depreciation
✓ Natural Resource(Timber 木材) --- Depletion（Depletion 就是 Nature Resource 的 Depreciation）
Intangible（不可触摸的资产）: No Physical Substance
Value represented by rights that produce benefits
eg: Copyright, Trademarks, Goodwill(名誉，商誉)
2. ACQUISITION COST(购置成本)
Building:
• Architectural Fees/ Permit
• Construction/ Evaluation Costs
• Interest Costs during Construction
• Removable of old Building--- included in land
Equipment:
• Purchase Price, including taxes
• Installation/testing costs
• Modification to building
• Transportation Cost(FOB Shipping)
Land:
• Legal fees, accrued/Delinquent Taxes(滞纳税
款)
• Real estate commissions
• Title insurance premiums
• Surveying fees, cleaning, grading, draining
• Title search and transfer fees
Land Improvement:
• Fences, parking lot surface and outside lighting
are recorded separately from land
• Improvement have limited life
** 这个表格仅供参考
注意：
1. Basket Purchase 的话 cost 是按比例分，不遵循上面的表格
2. 判断的准则：是否影响使用
3. 人为因素和常规维修都不算做 asset cost，算作_________
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1. Airbury Company acquired manufacturing equipment at an invoice price of $80,000 and paid $750
to have it delivered to the factory. $400 was spent to repair a door that was damaged while installing
the equipment. At what amount should this equipment be recorded on the company's books?
A) $81,150 B) $80,400 C) $80,750 D) $80,000
3. BASKET PURCHASE 打包购买
➢ 所有物品加起来得到一个总价格进行购买，不知道每个物品单独的价格，需要________
WestJet purchased a land, building and equipment, paying a total of $600,000. Market values for the
assets were not available, but appraised values were 200,000 for land, 500,000 for building and 180,000
for equipment. What’s more, there are legal cost 10,000, regrading of land cost 20,000 and revamp cost
for equipment is 15,000.
Appraised Value % of Value Assigned
Cost
Additional Total
Land
Building
Equipment
Total
Prepare Journal Entry:
1. Belmont Corporation made a basket purchase of land, a building and equipment, paying a total of
$1,500,000. Market values for the assets were not available, but the appraised values were $300,000
for the land, $900,000 for the building, and $600,000 for equipment. What amounts should be
recorded in the Land, Building, and Equipment accounts, respectively?
A) $250,000, $750,000, and $500,000 B) $1,500,000, $-0-, and $-0-
C) $300,000, $900,000, and $600,000 D) $500,000, $500,000, and $500,000
2. Johnson Company acquires land and building for $4,000,000 including all fees related to acquisition.
The land is appraised at $2,700,000 and the building at $2,100,000. The building is then renovated at
a cost of $750,000. What amount is capitalized to the building account?
A) $2,078,125 B) $4,000,000 C) $2,375,000 D) $2,500,000
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4. 3 METHOD TO CALCULATE DEPRECIATION(计算贬值的 3 种方法)
1. Straight-line (Assets used Evenly) --- 按照使用的年份来计算
Formula: =
−
#
=
2. Units-of-Production (Assets used based on the Output) --- 按照生产的个数来计算
Formula: =
−
=
= × # ________
3. Double Declining Balance (Assets value decline more up front) --- 按倍数进行减少
第一种：
Formula: = ( − ) ×
2
#
第二种：题目会说是 50% acceleration rate declining，如果是这样的话
Formula: = ( − ) ×
例题 SLIDES
WestJet purchase an equipment for $10,000, estimated useful life for 5 years, residual value is 1000.
1. Use straight line method to calculate the first year depreciation expense
2. If the equipment estimated can produce 10,000 units, and they produced 2000 units in first year,
can you calculate the depreciation expense
3. Use Double Declining method to calculate the first year depreciation expense
Which of the following is not a factor affecting the calculation of straight-line depreciation?
A) Useful life. B) Carrying amount. C) Residual value. D) Cost.
Nadler Inc. purchased equipment for $48,000, and estimated that the equipment will have a $4,000
residual value at the end of its 8-year useful life. Using the double-declining-balance method, the
depreciation expense for the third year would be
A) $6,750
B) $6,188
C) $5,500
D) $9,000
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5. CHANGES IN AMORTIZATION ESTIMATES(贬值发生改变)
Possible Changes:
1. _____________
2. _____________
3. _____________
Formula: =
(+∆− ) −
(+ ∆ − )
Angstrom Corporation purchased a truck at a cost of $60,000. It has an estimated useful life of five years
and estimated residual value of $5,000. At the beginning of year three, Angstrom's managers concluded
that the total useful life would be four years, rather than five. There was no change in the estimated
residual value. What is the amount of depreciation that Angstrom should record for year 3 under the
straight-line method?
A) $15,500 B) $11,000 C) $16,500 D) $8,250
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例题 SAMPLE MIDTERM Q2
On July 1, 2019, Gero Corp. purchased a factory, including land, building, and machines for $2,500,000
from Millan Inc. In addition, Gero paid in cash 2% of the cost for taxes, $34,000 in legal fees and
commissions, $152,000 for building renovation, and $42,000 to refurbish the machines. In making
payment to Millan, Gero issued 20,000 ordinary shares at $50 per share, signed a $1,300,000, 4% note
payable due June 30, 2021, with interest paid annually on the anniversary date, and the remaining balance
will be paid to Millan on September 1, 2019. Millan provides a 2% discount for payments made within 30
days. Gero’s year-end date is December 31.
Gero applies straight-line depreciation method on its capital assets. It estimated that the building would
last 20 years with a residual value of $100,000, and machines 7 years with a residual value of $20,000.
Required:
2019
1. Calculate the purchase cost of each capital asset, assuming the appraisal value shows that land is
worth 30%, building 60% and machines 10%.
2. Record the journal entries required related to the capital assets for 2019.
2020:
On October 2, Gero renovated the receiving area and paid $420,000. As a result the estimated residual
value increased by $50,000 and the useful life by 3.25 years. Due to water contamination by the
neighboring factory, on December 31, Gero did an impairment test on Land. The amount of value in use
was $450,000, and the fair value was $300,000.
3. Record all journal entries for 2020.
2021:
On April 1, Gero replaced the old machines by selling them for $150,000.
Record the disposal of the machines.
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例题 SAMPLE MIDTERM Q1
Grindstone Corp. (Grindstone) produces fad toys for children. In 2014, Grindstone purchased a new
stamping machine to produce the latest fad toy. The machine cost $100,000 plus taxes of $13,000, and
delivery and installation of $12,000. Grindstone's management estimates that the market for the toy is
about 600,000 units and demand will last no more than three years. Management expects that it will be
able to produce and sell 320,000 units in 2014, 210,000 units in 2015, and 70,000 units in 2016. Once the
fad dies, the machine won't be useful for any purpose and will have to be sold for scrap, about $4,000.
Grindstone will use unit-of-production depreciation for the machine.
Required:
1. Prepare the journal entry to record the purchase of the new machine.
2. Prepare a depreciation schedule showing the depreciation expense for each year and the carrying
amount of the machine at the end of each year.
3. Suppose that at the end of 2015, Grindstone's management realized the fad had died more quickly
than expected and there was no more demand for the toy. Prepare the journal entry to record the
sale and any other journal entries required with respect to the machine in 2015. Assume that
Grindstone produced and sold 75,000 units in 2015 and received $2,000 from a scrap dealer for
the machine.
4. Repeat Requirements (2-3) assuming that Grindstone will use straight-line depreciation for the
machine.
5. Repeat Requirements (2-3) assuming that Grindstone will use declining balance depreciation at a
rate of 50 percent for the machine. Evaluate the appropriateness of the rate Grindstone will use to
depreciate the machine.
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例题 SAMPLE MIDTREM Q3
Arnison Corp. purchased land and a building on May 1, 2011 for $ 385,000. The company paid
$ 115,000 in cash and signed a 5% note payable for the balance. The note is due on February 1,
2013. At that time, Arnison estimated that the land was worth $ 150,000 and the building
$ 235,000. The building was estimated to have a 25-year useful life with a $ 35,000 residual
value, The company has a December 31 year end and uses the single declining balance
depreciation. The following are related transactions and adjustments during the next three years:
2011：
Dec 31 Record the annual depreciation.
Paid the interest owning on the notes payable.
2012：
Feb 17 Paid 225 to have the furnace cleaned and serviced
Dec 31 Recorded the annual depreciation.
Paid the interest owing on the note payable.
The land and building were tested for impairment. The land had a net realizable value
amount of $ 120,000 and the value in use of $ 110,000. The building has a net realizable
value of $ 220,000 and a value in use of $ 240,000.
2013:
Jan 31 Sold the land and building for $ 320,000 cash - $ 110,000 for the land and $ 210,000 for
the building.
Feb 1 Paid the note payable and interest owing.
Required:
1. Record the above transactions and adjustments.
2. What factors may have been responsible for the impairment.
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例题 SAMPLE MIDTERM Q2
In January 2015, Bath Inc. (Bath) purchased an office building on a one hectare piece of land in
Saskatoon for $6,000,000. An appraiser valued the land at $1,375,000. The building is eight
years old and Bath's management expects it to last for another 12 years, after which time it will
have to be demolished. Management has decided to use straight-line depreciation.
Required:
Prepare the journal entries that Bath would make to record the purchase of the land and building.
What entry would be made to record the depreciation expense for the year ended December 31,
2015?
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6. INTANGIBLE ASSETS 无实物资产
特性：
Non-current Assets without Physical Substance --- 没有实体物品
Often provide exclusive rights or privileges --- 一般来说是权利或者特权
Useful life is often difficult to determine --- 使用的时长很难判断
Usually acquired for operational use --- 一般都是运营上使用的
Except for Goodwill, most intangible assets are proved by a legal document. --- 一般都是一些法律
文件
➢ Definite Life(有限时长): Use ___________________ Method
1. ___________________________商标
2. ___________________________专利
3. ___________________________版权
4. ___________________________经销权
5. Leasehold Improvements 租赁物件改良.
➢ Indefinite Life(无限时长): Not ________________
______________
1. Occurs when _______________________
2. Only purchase goodwill is an __________________________
3. Is not ________________
4. _____________________________ Every year
1. Which of the following is an example of an intangible with an indefinite life?
A) The goodwill value resulting from a business combination.
B) The research costs to develop a new drug.
C) A patent on a new invention.
D) A copyright on a book of poetry.
2. Depletion is recorded for which of the following
A) Intangible assets B) Land and buildings
C) Natural resources. D) Uncollectible trade receivables.
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CHAP 8 大题总结
1. 购买当天 --- Acquisition cost --- 主要考点 Basket Purchase
2. 使用过程中 --- Depreciation
Straight-line _________________________________
Unit of Production___________________________,
_________________
Double Declining _______________________________
*** Change in amortization _____________________________________
需要注意的点：
3. 最后卖的时候
a) 先计算本年的 Depreciation
b) 计算目前 Asset 的 Carrying Value
c) 算 Gain or Loss
d) Journal Entry
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Chap 9: Reporting and Interpreting Current Liability
1. LIABILITY, CURRENT LIABILITY
Liability 的定义:
✓ _______ future sacrifices of economic benefits
注意： 不一定是 sacrifice cash，还可以是_______
✓ Constitute a present obligation resulting from ________ transaction or event
✓ Measured at their current cash equivalent at the time incurred
Current Liability 的定义:
✓ One that is due or payable within the _______ operating cycle or the _____ fiscal year.
2. KNOW LIABILITY & ESTIMATE LIABILITY
Liability 除了我们平常学习的按时间分类以外，还有另一种分类方式，就是能否 determine 这个
liability 的价值
Known Liabilities(可以确定它的价值的负债):
✓ Account Payable
✓ Wages Payable
✓ Unearned Revenue
✓ Payroll Payable
o Payroll Expense(薪资支出):
Employee Employer
Employee Insurance(EI) :
失业保险，员工和公司都需要付 ____________ ___________
Canada Pension Plan(CPP)：
养老金，员工和公司都需要付 _____________ ____________
Income Tax: 个人所得税，只有员工要付
………
Estimate Liabilities(无法确定价值，只能通过预估)
✓ Income Taxes Payable
✓ Warranty Liabilities
o Record the estimated warranty(卖出去的时候):
Warranty expense（SE） 460
Est. Warranty Liability 460
o Record when repair work(产生服务的时候)
Warranty Liability 300
Cash 300
✓ Frequent Flyer
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3. PROVISION & CONTINGENT LIABILITIES
Provision Liability（预计负债）:
✓ A present obligation exists
✓ It is probable that outflow of resources is required
✓ The amount of obligation can be reasonably ___________
有较大可能性会发生的债务，不知道何时发生，但是可以衡量金额，一般记作 long-term Liability
Contingent Liabilities (或有债务)
• A contingent liability is a _______ liability that is created as a result of a _____ event; it is not an
effective liability until some future event occurs
还未发生但是有可能会发生的债务状况，一般只写在附注
E.g： Law Sue
Likely Unlikely Not Determinable
Yes
No
4. 可能会考的 RATIO
⚫ Current Ratio =
Measure the ability of the company to pay current debt as they become due
公司偿还短期债务的能力
⚫ Quick Ratio =
Quick Asset = Cash, net account receivable, note receivable, and short-term investment
Measure ability to pay its current debts quickly
衡量公司偿还短期债务的速度
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1. A contingent liability is recorded in the accounting records
A) if a reasonable estimate of the expected loss can be determined and if it is probable.
B) if it will possibly become an actual liability, and the exact amount is unknown.
C) under no circumstances.
D) if the contingency has not already been disclosed in the notes to the financial statements.
2. Which of the following is correct with respect to a contingent liability that is "reasonably possible"
but "cannot reasonably be estimated"?
A) It must only be disclosed as a note to the financial statements.
B) It must be recorded and reported as a liability.
C) It does not need to be recorded or reported as a liability.
D) It must be reported as a liability, but not recorded.
1. Big Top Electronics Inc. offers a two-year warranty on its products. The estimated liability
is 4% of sales in the year of sale and 6% in the second year. Sales for 20X0 and 20X1 were:
$2,500,000 and $2,800,000, respectively. They incurred no warranty costs in 20X0 but in
20X1 they spent $175,000 on repairs related to the warranties from 20X0 and 20X1.
1. Big Top's warranty liability at the year-end 20X0 is
A) $250,000 B) $150,000 C) $100,000 D) $0
2. Big Top's warranty expense for 20X0 is
A) $80,000 B) $100,000 C) $250,000 D) $150,000
3. Big Top's warranty liability as at the end of the 20X1 year is
A) $380,000 B) $280,000 C) $75,000 D) $355,000
2. Site Company had the following account balances related to payroll at the end of the period:
CPP payable --- employees’ share 7,000
Liability for income taxes withheld 20,000
Salary and wage expense 95,000
Without considering any employer payroll taxes, Site would record Salaries Payable for the pay period
amounting to which of the following?
A) $75,000 B) $61,000 C) $68,000 D) $95,000
3. An employee receives a bi-weekly gross salary of $2,000. Income tax is $218, CPP is $99, EI is $36,
and union dues are $50. What is the amount of the employee's take home pay (net pay) on a bi-
weekly basis?
A) $1,597 B) $1,782 C) $1,732 D ) $2,000
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