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    Intermediate Accounting Midterm Examination Answer The Following Questions. Show Your Solutions. Problem 16

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    Renalyn Paras
    This document contains an intermediate accounting midterm exam with 20 multiple choice problems. Problem 16 asks about calculating gain on reversal of impairment for a machine that was reclassified as held for sale. Problem 17 asks about recognizing an inventory loss from market decline. Problem 18 asks about amounts to include in determining net income/loss for a period relating to disposal of a business segment and property tax payment.

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    Intermediate Accounting Midterm Examination Answer The Following Questions. Show Your Solutions. Problem 16

    Uploaded by

    Renalyn Paras
    61 views2 pages
    This document contains an intermediate accounting midterm exam with 20 multiple choice problems. Problem 16 asks about calculating gain on reversal of impairment for a machine that was reclassified as held for sale. Problem 17 asks about recognizing an inventory loss from market decline. Problem 18 asks about amounts to include in determining net income/loss for a period relating to disposal of a business segment and property tax payment.

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    INTERMEDIATE ACCOUNTING_MIDTERM_2019-2020_2nd semester_PART4

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    This document contains an intermediate accounting midterm exam with 20 multiple choice problems. Problem 16 asks about calculating gain on reversal of impairment for a machine that was reclassified as held for sale. Problem 17 asks about recognizing an inventory loss from market decline. Problem 18 asks about amounts to include in determining net income/loss for a period relating to disposal of a business segment and property tax payment.

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    © All Rights Reserved
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    61 views2 pages

    Intermediate Accounting Midterm Examination Answer The Following Questions. Show Your Solutions. Problem 16

    Uploaded by

    Renalyn Paras
    This document contains an intermediate accounting midterm exam with 20 multiple choice problems. Problem 16 asks about calculating gain on reversal of impairment for a machine that was reclassified as held for sale. Problem 17 asks about recognizing an inventory loss from market decline. Problem 18 asks about amounts to include in determining net income/loss for a period relating to disposal of a business segment and property tax payment.

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    INTERMEDIATE ACCOUNTING

    MIDTERM EXAMINATION

    ANSWER THE FOLLOWING QUESTIONS. SHOW YOUR SOLUTIONS.

    PART 4

    PROBLEM 16

    On April 1, 2017, Brandie Company had a machine with a cost of 5,000,000


    and accumulated depreciation of 3,750,000.

    On April 1, 2017, the entity classified the machine as held for sale and
    decided to sell the machine within one year.

    On April 1, 2017, the machine had an estimated selling price of 500,000 and
    a remaining useful life of 2 years.

    It is estimated that selling cost associated with the disposal of the machine
    will be 50,000.

    On December 31, 2017, the estimate selling price of the machine had
    increased to 750,000 with estimated selling cost of 100,000.

    What amount should be recognized as gain on reversal of impairment on


    December 31, 2017?
    _________________

    PROBLEM 17

    Harry Company incurred an inventory loss from market decline of 840,000


    on June 30, 2017.

    What amount of the inventory loss should be recognized in the quarterly


    income statement for the three months ended June 30, 2017?
    _______________

    PROBLEM 18

    On June 30, 2017, Miles Company incurred a 1,000,000 net loss from
    disposal of a business segment. Also, on June 30, 2017, the entity paid
    400,000 for property taxes assessed for the calendar year 2017.
    What total amount should be included in the determination of the net
    income or loss for the six-month period ended June 30, 2017? ______________

    PROBLEM 19

    Ford Company has historically reported bad debt expense of 5% of sales in


    each quarter. For the current year, the entity followed the same procedure
    in the three quarters of the year.

    However, in the fourth quarter, the entity determined that bad debt
    expense for the entire year should be 450,000.

    Sales in each quarter of the year were first quarter 2,000,000, second
    quarter 1,500,000, third quarter 2,500,000 and fourth quarter 4,000,000.

    What amount of bade debt expense should be recognized for the fourth
    quarter? _____________

    PROBLEM 20

    Kelly Company reported 950,000 net income for the quarter ended
    September 30, 2017 which included the following after tax items:

     A 600,000 expropriation gain, realized on April 30, 2017, was


    allocated equally to the second, third, and fourth quarters of 2017.
     A 160,000 cumulative-effect loss resulting from a change in inventory
    valuation method was recognized on August 1, 2017.

    In addition, the entity paid 480,000 on February 1, 2017, for 2017 calendar-
    year property taxes. Of this amount, 120,000 was allocated to the third
    quarter of 2017.

    For the quarter ended September 30, 2017, what amount should be
    reported as net income? ______________

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