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Question
A significant difference in depreciation accounting between US GAAP and IFRS accounting is that in IFRS:
a. Management has the option of periodically revaluing property, plant and equipment to market value
b. Management is mandated to revaluing property, plant and equipment to market value
c. Management may use hypothetical future value in depreciating assets
d. There are no differences in depreciation accounting between US GAAP and IFRS
Answer
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Related questions
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A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 5 years with a salvage value of $20,000. Under the straight-line method, the book value and the accumulated depreciation of the machine at the end of year two is respectively,
a. $60,000 and $40,000
b. $68,000 and $32,000
c. $40,000 and $60,000
d. $48,000 and $32,000
Q:
A machine was purchased on January 1 for $50,000. The machine has an estimated useful life of 10 years with a salvage value of $2,000. Under the double-declining-balance, depreciation expense for each of the first two years is, respectively,
a. $12,000 and $12,000.
b. $10,000 and $8,000.
c. $12,000 and $9,500.
d. $12,500 and $12,500.
Solution: $50,000 x 2/10 and ($50,000 - $10,000) x 2/10
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Sandeep Inc. uses double-declining-balance depreciation for an asset with a 4-year life expectancy and no salvage value. Depreciation expense for the second year of the asset's life is calculated by:
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b. [2 x (Cost Salvage Value]/4
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Which one of the following depreciation methods will typically result in the smallest earnings per share during the early periods of an asset's life?
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b. decreases total assets.
c. decreases the current ratio.
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b. is a long-term liability.
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B. On May 16, a 3-for-1 stock split was distributed.
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$ 2,000 Additional paid-in capital
60,000 Retained earnings
58,000 Total shareholders equity
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June 16 - A 15% stock dividend was declared and issued. Market value per share is currently $18.
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$50,000 Additional paid-in capital
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180,000 Total
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+ A and + SE (Retained Earnings) d.
+ A and A e.
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On January 1, 2014, Enron Corporation issued a 4-year, 7%, $9,000 bond payable. Beginning in 2015, interest is payable annually every January 1. The market rate of interest at issuance is 9%. How much are the interest payments by Enron? Why is the amount of interest expense different than the cash payments?
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On January 1, 2014, Mango Corporation issued a 3-year, 4%, $3,000 bond payable. Beginning in 2015, interest is payable every year on January 1 over the life of the bond. The market rate of interest on January 1, 2014 is 6%. What are the proceeds received by Mercer from the issue of this bond on January 1, 2014?