Tremendous Company is involved in the exploration for mineral resource. The accounting policy to recognize and measure exploration asset initially at cost. During the current year, the entity incurred the following expenditures: Exploratory drilling for materials on site and related activities Roads and infrastructure to access exploratory site Expenditure relating to the subsequent development of the resources P 3,000,000 5,250,000 5,100,000 QI. At what amount should exploration asset be initially recognized in the statement of financial position?
Q: Suppose that Best Buy issued $890000 of 8%, 5-year bonds at 108. Assuming straight-line amortization…
A: Amortization of premium :The amortization of bond premium is calculated by dividing the total bond…
Q: Championship Corporation’s three divisions had the following operating data during 20X1. Jordan…
A: Residual income is the difference between net operating income and minimum required return. The…
Q: Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two…
A: The step-down method is used for allocating the service department's costs to operating or…
Q: 1. Expected loss 2. Tolerance cm
A: The question is based on the concept of Cost Accounting.Quality is defined as a concept that refers…
Q: Johnson Electronics is considering extending trade credit to some customers previously considered…
A: Incremental income, also known as marginal income, refers to the additional income generated by…
Q: Your manager has asked that you create the monthly financial statements for ABC Company. They gave…
A: According to the question given, we need to prepare the financial statement of ABC Company.Financial…
Q: ses borrow money during periods of increased business activity to finance inventory and accounts…
A: The accounting equation states that the assets are equal to the sum of liabilities and equity. The…
Q: The Bronco Corporation exchanged land for equipment. The land had a book value of $136,000 and a…
A: When the fair value of equipment is included as part of consideration in a transaction and is…
Q: At the beginning of June, Circuit Country has a balance in inventory of $2,350. The following…
A: Under the periodic inventory system, the firm does not keep a continuous record of the inventory on…
Q: Required information [The following information applies to the questions displayed below.] Trio…
A: ABSORPTION COSTINGAbsorption Costing is a Cost Management Accounting method in which all costs…
Q: n fiscal 2023, Swifty Realty Corporation purchased unimproved land for $57,000. The land was…
A: Sales revenue means amount earned on account of sales of goods and services. The cost of goods sold…
Q: LO 8-7 Brief Exercise 8-7 Effect of stock dividends on financial statements Hernandez Corporation…
A: A stock dividend is a corporate action taken by the company to issue shares without consideration.…
Q: Leslie Company operates a cafetena for the benefit of its employees. The company subsidizes the…
A: The budgeted cost allocation rate is computed by dividing the total budgeted cost by the total…
Q: TB MC Qu. 8-176 (Algo) Caspion Corporation makes and sells... Caspion Corporation makes and sells a…
A: Direct material budget :— This budget is prepared to estimate the number of units and cost of…
Q: Skysong Brothers Inc. purchased land and an old building with the intention of removing the old…
A: The cost of land is typically calculated at its acquisition cost, which includes all directly…
Q: Required: Determine how much cash ABC Company will realize from the bond issue. Note: Use tables,…
A: One of the sources of raising funds by business entities is issue of debt securities i.e. Bonds,…
Q: Blue Company owns equipment that cost $1,098,000 and has accumulated depreciation of $463,600. The…
A: Impairment loss occurs when the carrying amount of an asset exceeds its recoverable amount. The…
Q: Current Attempt in Progress Waterway Family Importers sold goods to Tung Decorators for $41,400 on…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: Required (a) Should Brackley Co. accept the order or not? (b) If Brackley Co. had no spare capacity…
A: (a) To determine whether Brackley Co. should accept the order or not, we will perform a contribution…
Q: Required: 2a. Complete the chart below that shows comparisons of the two depreciation methods.…
A: Straight Line Method (SLM): Under this method, a fixed portion of asset is depreciated each year…
Q: incorrect
A: When a note payable is issued, the borrowing entity is legally obligated to return the borrowed…
Q: Decreases in economic benefits in the form of outflows or depletions of assets or incurrences of…
A: Lets understand the basics.Lets understand the basics.Elements of Financial Statements:The…
Q: On December 31, 2025, Sandhill Company had $1,103,000 of short-term debt in the form of notes…
A: The company had notes payable of $1,103,000 as of December 31, 2025. These notes are due on February…
Q: Determine the missing amounts. Total Manufacturing Costs $248.800 $ $260,400 Work in Process (Jan 1)…
A: Lets understand the basics.Total manufacturing costs are the total of all the direct material,…
Q: The Pharma company is a single product company. The company presents the following information…
A: FIFOCost of Goods soldEnding…
Q: QUESTION 26 Mona has a basis in her Partnership Interest of $21,000 when her interest is terminated…
A: In a complete liquidation of a partnership interest, the partner's basis in the distributed assets…
Q: In the process of making its quilts, Coronado Company ends up with many small trimmings of fabric…
A: Joint cost is the total cost incurred in producing the main product and the joint product.There are…
Q: Trey has two dependents, his daughters, ages 14 and 18, at year-end. Trey files a joint return with…
A: Child Tax Credit = $2,000 (For age 14)Dependent Credit = $500 (For age 18)Total Deductible Credit =…
Q: The transactions relating to the formation of Blue Company Stores Incorporated, and its first month…
A: Income statement is a financial statement that records all the income and expenses of the business…
Q: Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two…
A: Cost allocation is the process of assigning or distributing costs among various cost objects, such…
Q: Tri-State Bank and Trust is considering giving Sheffield Company a loan. Before doing so, management…
A: Lets understand the basics.Physical inventory count is generally done at frequent time period in…
Q: Walsh Company manufactures and sells one product. The following information pertains to each of the…
A: Variable Costing Method: It is the method of costing that determines the product cost by considering…
Q: Superlor Developers sells lots for residential development. When lots are sold, Superior recognizes…
A: Deferred tax liability is the amount of tax liability imposed on difference between accounting…
Q: Ames Trading Company has the following products in its ending inventory. Required: Compute lower of…
A: The objective of this question is to calculate the lower of cost or market (LCM) for each product in…
Q: Locate the Competition Act, R.S.C., 1985, c. C-34. Below the long title of the legislation, it…
A: The Competition Act, R.S.C., 1985, c. C.34, is a Canadian federal law that governs competition and…
Q: The Oriole Co. knows that students want new backpack and jacket styles before school begins each…
A: In this question, we need to recognize the revenue for both Backpack and Jackets separately using…
Q: Stuart Corporation reported the following operating results for two consecutive years: Required a.…
A: HORIZONTAL ANALYSISHorizontal Analysis is one of the important analysis techniques for financial…
Q: How is the depreciation per hour calculated in the unit of production method?
A: DepreciationDepreciation is a non cash expenses, It denotes the reduction in asset value due to wear…
Q: Taxable Income for 2023?
A: Business loss can't be setoff against salaries.
Q: A company has the following expenditures during the year Advertising Employee training Customer…
A: IAS 36, the International Accounting Standard dealing with Impairment of Assets, specifies that…
Q: Persaud Corp. convinced Bracebridge Inc. that the two companies should establish Renfrew Ltd. to…
A: Consolidated balance sheet is a financial Statement that shows the financial position of the parent…
Q: On December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period.…
A: Lease Liability represents the amount recognized by a lessee in its statement of financial position…
Q: TB MC Qu. 05-163 (Algo) Salmone Company reported the following... Salmone Company reported the…
A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…
Q: Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line…
A: Merger refers to the process of uniting two or more than two organizations. In this process, one…
Q: Sims Company began operations on January 1 Its cost and sales information for this year follow. $40…
A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…
Q: Record the effect, if any, of the transaction entry or adjusting entry on the appropriate balance…
A: Every journal entry has two aspects, i.e. the debit and credit side. Upon recording of a journal…
Q: Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified…
A: Profit margin is calculated by dividing operating income by sales. Operating income is the…
Q: A company constructs a building for its own use. Construction began on January 1 and ended on…
A: Borrowing costs that are directly attributable to the acquisition, construction, and production of…
Q: rez Company began operations this year. During this year, the company produced 100,000 units and…
A: The contribution margin is calculated as the difference between the sales and variable costs. The…
Q: TB Problem Qu. 9-375 (Algo) Varcoe Corporation bases its budgets on... Varcoe Corporation bases its…
A: The activity variance is the difference between the flexible budget and planning budget. The…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 2. The ABC Company is involved in the exploration of mineral rights. Its policy is to recognize exploration assets and measure them initially at cost. During 2021 ABC incurs the following expenditure. Exploratory drilling for minerals on site and related activities, P200,000; Roads and infrastructure to access exploration site P350,000, Expenditures relating to the subsequent development of the resources, P340,000. In accordance with IFRS6 Exploration for and evaluation of mineral resources, at what amount should exploration assets be initially recognized in the financial statements of ABC?16. Ebasan Company is involved in the exploration for mineral resources. Its policy is to recognize exploration assets and measure them initially at cost. The following amounts were extracted from Ebasan's financial statements: Trenching and sampling expenditure P500,000 300,000 Drilling rigs used for exploration, carrying amount Drilling rigs used for exploration, depreciation expense 30,000 In accordance with PFRS 6 Exploration for and evaluation of mineral resources, at what amount should intangible exploration assets be initially recognized at in the financial statements? A. 500,000 B. 800,000 C. 530,000 D. 830,000Zoomer Inc. purchased a parcel of land with the intention of mining for phosphate. How should the land be recorded in Zoomer’s financial statements while the company is determining the technical feasibility of mining the land? Assume that Zoomer reports under IFRS. Question 16 options: a) As property, plant, and equipment, capitalized under IAS 16. b) As exploration and evaluation costs, capitalized under IFRS 6. c) As prospecting costs, expensed as incurred. d) As inventory, capitalized under IAS 2.
- Inspector Gadget Ltd has a policy of writing off development expenditure to the Income Statement as was incurred. In preparing its financial statements for the year 20X7 it became aware that under IFRS rules qualifying expenditure should be treated as an intangible asset. Below is the qualifying expenditure for the company: Year ended 30 Sep 20X4 Year ended 30 Sep 20X5 Year ended 30 Sep 20X6 Year ended 30 Sep 20X7 $'000 300 240 800 400 All capitalized expenditure is deemed to having a four year life. Assume that amortization starts at the beginning of the accounting period following capitalization. Inspector Gadget Ltd has no development expenditure before that for the year ended 30 September 20X4. Required: b. Treating the above as the correction of an error in applying an accounting policy, calculate the amounts that should appear in the income statement and statement of financial position (including comparative figures) and statement of changes in equity of the company inb respect…Multiple Choice Questions According to IAS 38 Intangible assets, which of the following statements about research and development expenditure are correct? i. If certain conditions are met, an entity may decide to capitalise development expenditure. ii. Research expenditure, other than capital expenditure on research facilities, must be written off as incurred. ill. Capitalised development expenditure must be amortised over period not exceeding 5 years iv. Capitalised development expenditure must be disclosed in the statement of financial position under intangible non-current assets. Oil and iv O and ill only Oil and iv only Oil and iv only Next questionAt the date of purchase, materials, equipment, facilities, and intangibles purchased from others thathave alternative future uses in research and development should be a. capitalizedb. charged directly to retained earningsc. included in R&D expense immediatelyd. charged as a loss from continuing operations
- For entities that report using IFRS, how are exploration and evaluation assets subsequently measured? Question 18 options: a) Using the cost or revaluation model. b) Using the cost model or fair value model. c) Using the cost model. d) Using the cost model or depreciation model.The Bass Strait Oil Company Limited incurs the following exploration and evaluation costs at two sites. Area A and Area B, over the years indicated: Year Area A (millions) Area B (millions) 2021 $10.0 $11.0 2022 $11.0 $13.0 2023 $13.0 $15.0 In relation to the above expenditure, in each year 20 percent relates to intangible assets and the balance of the expenditure relates to property, plant and equipment. At the end of 2023, oil of an economically recoverable nature is discovered at Area A but Area B is abandoned. In 2024, following the discovery of oil at Area A, roads and other infrastructure are constructed at a cost of $2 million. Portable buildings at a cost of $0.50 million are also put in place. After the above constructions, Area A commences operation. It is assumed that the entity adopts the cost model and does not perform revaluations. Required Provide the necessary journal entries for the years ending 2021, 2022, 2023 and 2024 using…PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.
- d. Information that identifies and explains the amounts recognized in the financial statements arising from the exploration for and evaluation of mineral resources. (Adapted) Problem Solving: Solve the following. Show your solutions in good form. Problem 1: On January 1, 2018 Samar Company paid P5, 400, 000 for property containing natural resource of 2,000,000 tons of ore. The estimated discounted amount of restoring the land after the resource is exhausted isP450, 000 and the land will have a value of P650,000 after it is restored for suitable use. Tunnels, bunk houses and other fixed installation are constructed in the amount of P8, 000, 000. Such expenditures are to be charged to mine improvements. Operations began on January 1, 2019 and resource removed totaled 600,000 tons. During 2020, a discovery was made indicating that available resources after 2019 will total 1,875,000 tons. At the beginning of 2020, additional bunk houses were constructed in the amount of P770,000. In 2020,…Research and development costs are while of the following? are classified as intangible assets. should be included in the cost of the patent they relate to. must be expensed when incurred under generally accepted accounting principles. are capitalized and then amortized over a period not to exceed 40 years.Discuss and explain If an entity is considering revaluing its exploration and evaluation assets, would the revaluation increase the ‘relevance’ of the information from the perspective of the readers of the financial statements? Further, provide explanation for capitalising the expenses at evaluation and exploration stage also restoration of a oil extraction project.