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M095 Chapter 8 Test 20-1.pdf

Red River Outdoor Ltd. replaced the roof membrane on a manufacturing facility for $140,000. The original roof had been capitalized at $120,000 with accumulated depreciation of $95,000 at the replacement date. Engineers indicated that the new roof is a significant component and extends the asset’s remaining service potential. What is the correct accounting impact?

Lakeshore Packaging Inc. replaced a failed motor on a high-speed processing line. The new motor cost $52,000, and installation cost $3,500. The old motor had a remaining carrying amount of $9,000. The replacement increases output capacity compared to the original motor. How should Lakeshore record the replacement?

Skyline Engineering Ltd. sells equipment with a cost of $950,000 and accumulated depreciation of $430,000. The buyer pays $440,000, but Skyline must cover $12,000 in decommissioning and transport costs as part of the sale agreement. What gain or loss should be recognized?

Northern Trail Outfitters traded in a delivery van with a carrying amount of $24,000 toward a newer used van. The dealer provided a $21,000 trade-in allowance, and Northern Trail paid $6,000 in cash. The fair value of the replacement van was reliably measured at $27,000. The transaction has commercial substance. What is the appropriate accounting treatment?

A truck was purchased July 1 for $90,000, 5-year life, $5,000 residual. Straight-line, half-year rule. Depreciation for the first year?

On disposal, the gain or loss equals:

A company uses declining-balance at 30%. Carrying amount is $50,000. What is depreciation for the year?

Under ASPE, which of the following must be included in the initial cost of PPE?

Componentization under ASPE means: