Reported if the company had always used ddb is listed

Info icon This preview shows pages 56–63. Sign up to view the full content.

View Full Document Right Arrow Icon
reported if the company had always used DDB is listed below: Required: What journal entry, if any, should Weaver make to record the effect of the accounting change (ignore income taxes)? Explain.
Image of page 56

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
123. Gonzaga Company has used the double-declining-balance method for depreciation since it started business in 2009. At the beginning of 2013, the company decided to change to the straight-line method. Depreciation as reported and what it would have been reported if the company had always used straight-line is listed below: Required: What journal entry, if any, should Gonzaga make to record the effect of the accounting change (ignore income taxes)? Explain.
Image of page 57
124. In December of 2013, XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2011. The asset had an expected life of 10 years with no residual value. XL would have recorded a half year of depreciation in 2011. Required: Prepare the necessary correcting entry that would be made in 2013 (ignore income taxes), and the entry to record depreciation for 2013. El Dorado Foods Inc. owns a chain of specialty stores in the Pacific Northwest. Recently, four of the stores have experienced declining profits due to market saturation in the area. As a result, management gathered data about possible impairment of the assets of the stores. The information gathered was as follows: Book value: $17.5 million Fair value: $14.9 million Undiscounted sum of future cash flows: $16.5 million
Image of page 58

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
125. Required: Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets. 126. Required: Assume that the undiscounted sum of future cash flows is $18.2 million, instead of $16.5 million. Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets.
Image of page 59
In 2012, Dooling Corporation acquired Oxford Inc. for $250 million, of which $50 million was attributed to goodwill. At the end of 2013, Dooling's accountants derive the following information for a required goodwill impairment test: 127. Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.
Image of page 60

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
128. Assume the same facts as above, except that the fair value of Oxford (the reporting unit) is $225 million. Required: Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.
Image of page 61
129. Wicker Corporation operates a manufacturing plant in California. Due to a change in business climate, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: The fair value of the California plant is estimated to be $24,000,000. Required: 1. Determine the amount of impairment loss, if any. 2. If a loss is indicated, where would it appear in Wicker's multiple-step income statement? 3. If a loss is indicated, prepare the entry to record the loss.
Image of page 62

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 63
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern