Scribd Logo
Upload

Welcome to Scribd!

  • 209 views

    IFA-I Assignment PDF

    Uploaded by

    Natnael Asfaw

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    IFA-I Assignment PDF

    Uploaded by

    Natnael Asfaw
    209 views3 pages

    Original Title

    IFA-I Assignment.pdf

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    209 views3 pages

    IFA-I Assignment PDF

    Uploaded by

    Natnael Asfaw

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    HARAMAYA UNIVERSITY

    DCOLLEGE OF BUSINESS AND ECONOMICS


    DEPARTMENT OF ACCOUNTING AND FINANCE
    Assignment for the course Intermediate Financial Accounting I

    Weight: 30%

    Submission date: On your final exam date

    1. Match the qualitative characteristics below with the following statements.


    1. Relevance 5. Comparability
    2. Faithful representation 6. Completeness
    3. Predictive value 7. Neutrality
    4. Confirmatory value 8. Timeliness
    (a) Quality of information that permits users to identify similarities in and differences between
    two sets of economic phenomena.
    (b) Having information available to users before it loses its capacity to influence decisions.
    (c) Information about an economic phenomenon that has value as an input to the processes used
    by capital providers to form their own expectations about the future.
    (d) Information that is capable of making a difference in the decisions of users in their capacity as
    capital providers.
    (e) Absence of bias intended to attain a predetermined result or to induce a particular behavior.
    2. What is the role of fair value measurement for financial reporting?

    3. Kumar Inc. uses a perpetual inventory system. At January 1, 2015, inventory was
    $214,000,000 at both cost and net realizable value. At December 31, 2015, the inventory
    was $286,000,000 at cost and $265,000,000 at net realizable value.

    Required: Prepare the necessary December 31 entry under (a) the cost-of-goodssold
    method and (b) the loss method.

    4. Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2022, for
    $54,000. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will
    be useful for 10 years. Prepare Celine Dion’s journal entries to record the purchase of the
    patent and 2022 amortization.
    5. Waters Ltd. purchased Jang Group 3 years ago and at that time recorded goodwill of
    HK$400,000. The Jang Division’s net assets, including the goodwill, have a carrying amount of
    HK$800,000. The fair value of the division is estimated to be HK$1,000,000.
    Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill.

    6. Floyd Corporation has the following four items in its ending inventory.
    Item Cost Value Net Realizable (NRV)
    Jokers €2,000 €2,100
    Penguins 5,000 4,950
    Riddlers 4,400 4,625
    Scarecrows 3,200 3,830
    Determine (a) the LCNRV for each item, and (b) the amount of write-down, if any, using
    (1) an item-by item LCNRV evaluation and

    7. (2) a total-group LCNRV evaluation. The following is selected account information related to
    Matt Perry Inc. as of December 21, 2022. All these accounts have debit balances.
    Cable television franchises Film contract rights
    Music copyrights Customer lists
    Research and development costs Prepaid expenses
    Goodwill Covenants not to compete
    Cash Brand names
    Accounts receivable Notes receivable
    Property, plant, and equipment Investments in associated companies

    Internet domain name Organization costs

    Land

    Instructions
    Identify which items should be classified as intangible assets. For those items not classified as
    intangible assets, indicate where they would be reported in the financial statements.
    8. Power glide plc, organized in 2021, has set up a single account for all intangible assets. The
    following summary discloses the debit entries that have been recorded during 2022.

    1/2/22 Purchased patent (8-year life) £ 380,000

    4/1/22 Goodwill (indefinite life) 360,000


    7/1/22 Purchased franchise with 10-year life; expiration date 7/1/32 450,000
    9/1/22 Development costs to increase the value of the patent
    (£55,000incurred after economic viability achieved) 215,000
    8/1/22 Payment of copyright (5-year life) 156,000
    £1,561,000

    Instructions
    Prepare the necessary entries to clear the Intangible Assets account and to set up separate
    accounts for distinct types of intangibles. Make the entries as of December 31, 2022,
    recording any necessary amortization and reflecting all balances accurately as of that date.
    (Use straight-line amortization.)

    You might also like