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# Week 3 - 7 Yes \$700,000 Problem 6.18 1 Investments \$8,500 2...

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Suggested solutions to preparation questions – Week 3 Problem 6.14 1. Yes, prepayment, 10.5/12 x 10,000=\$8,750 2. Yes, patent, \$100,000 3. No asset 4. Yes, land. It could be valued at cost \$500,000 or revalued to \$750,000, depending on the LMR Ltd’s accounting policy. 5. Yes, printing machines \$500,000; goodwill \$400,000 6. Nil, internally generated goodwill is not recognized as an asset.
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Unformatted text preview: 7. Yes, \$700,000 Problem 6.18 1. Investments, \$8,500 2. Deposit on equipment, \$5000 3. Inventory, \$900 4. Nil 5. Nil 6. Inventory, 98% x \$1200=\$1176 Problem 9.7 1. Total cost of the asset = \$1,000,000 + \$7,500+ \$18,000 = \$1,025,500 2. Depreciation expense = \$1,025,500/10 = \$102,550 3. Accumulated depreciation = \$102,550*2 = \$205,100...
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