Show the accounting entries in the accumulated amortization

Assignment Help Financial Accounting
Reference no: EM132962673

Air New Zealand acquired an airline route authority between Auckland, New Zealand and Cairo, Egypt on 1 July 20X7 for $ 2,500,000 which expires in five years. Straight line amortization will be used. At 1 January 20X8, five tourists, one an American and the rest Australians, were abducted by Egyptian militants while holidaying in Egypt. As a result of worldwide coverage of the abduction in the print and electronic media, the number of tourists travelling to Egypt dropped drastically. Because of this adverse event, the recoverable amount of the airline route authority acquired by Air New Zealand was assessed at $ 1,000,000 on 1 January 20X8. The Egyptian economy which is largely dependent on revenue generated from foreign tourists visiting the country was severely affected as result of the abduction. In order to regain the confidence on international tourists and revive the economy, the Egyptian government invited the United States Military Pacific Command to set up a naval base on the coast line of Mediterranean on the Egyptian side. The US naval base was finally set up on July 20X9. On 1 January 20X10, due to favorable market conditions reflected by the steady surge in the number of tourist visiting Egypt, the recoverable amount was assessed at $ 1,500,000. Amortization of airline route authority is calculated based on time apportionment basis (i.e. amortization in the year of acquisition is apportioned based on number of months used in the year). The firm's year end is 31 December each year.

Required:

Problem a) Show the accounting entries in the following accounts for years 20X7 - 20X12:
i) Airline route authority - Intangible Asset
ii) Accumulated Amortization

Reference no: EM132962673

Questions Cloud

How much cash was provided by operating activities : Prepaid expenses and accounts payable decreased by $2,000 and $11,000 respectively. How much cash was provided by operating activities
What is the company free cash flow for the year : The company's operating income for the year is $245.80 million, What is the company's free cash flow for the year if its tax rate is 25%?
What was the adjusted alos : In 2009, Hospital ABC had ALOS of 6.9, 453 beds, and 21,000 discharges. What was the occupancy rate in 2009? What was the adjusted ALOS
Compute the value-in-use of the cruise ship as at december : =Compute the value-in-use of the cruise ship as at 31st December, 20X5. Sea Leisure Ltd is a company specializing in world cruise holiday packages
Show the accounting entries in the accumulated amortization : The firm's year end is 31 December each year. Show the accounting entries in the Accumulated Amortization accounts for years 20X7 - 20X12
Write a function that models the value of the car : A new car that sells for $18,000 depreciates 25% each year. Write a function that models the value of the car. Find the value of the car after 4 years
Compute the monthly beginning of the periodic payment : He estimates the current deficit for his college education funds is $65,009. Compute the monthly beginning of the periodic payment that is necessary to fund
Compute the annualized rate of return earned by fluffy : Client has asked for a similar loan, but has asked to forgo interest payments in may and June. If Fluffy can make only one of the loans, which should it make?
What is the net present value of the project : Stone Inc. is evaluating a project with an initial cost of $9,500. If the discount rate is 6%, what is the net present value of the project

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd