Assignment 5 - Emma OGrady BBUS 3201 Assignment 5 Q 1...

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Emma O’Grady BBUS 3201 Assignment 5 June 17, 2016
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Q 1: Exercise 10 – 4 A) All the costs listed except for the cost of the trees, shrubs and other landscaping can be included in the cost of land, building and machinery according to the IFRS, as all of them attribute to future cash flows from the asset. B) ASPE gives the option to include the Interest on short-term loans on the cost of the asset, or to expense it separately. C) Being able to capitalize borrowing costs increase the EPS as compared to expensing them separately. Q 2: Problem 10 – 8 A) Garrison Construction: Cash Crane (New) Accumulated Depreciation – #6RT Accumulated Depreciation - #S79 Loss on Disposal of Cranes Crane #6RT Crane #S79 $17,500 185,000 15,000 18,000 14,500 $130,000 120,000 Pisani Manufacturing: Inventory (used #6RT) Inventory (used #S79) Cash Sales Revenue Gain on Sale $128,000 87,500 $17,500 185,000 13,000 Cost of Goods Sold Inventory 165,000 165,000
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B) Garrison Construction: Cash Crane (New) Accumulated Depreciation - #6RT Accumulated Depreciation - #S79 Loss on Disposal Crane #6RT Crane #S79 $17,500 185,000 15,000 18,000 14,500 $130,000 120,000 Pisani Manufacturing: Inventory (Used #6RT & #S79) Cash Sales Revenue $202,500 $185,000 17,500
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