Reference no: EM132699349

Questions -

Q1. The first step in the revaluation of a depreciated asset is to

a. write-off the accumulated depreciation balance

b. record depreciation up to the date of the asset revaluation

c. transfer the balance of accumulated depreciation to the income statement

d. record the revaluation

Q2. James Ltd acquired all the shares of Brianna Ltd for $655,000. Brianna Ltd's Statement of Financial Position at the date of acquisition shows total assets of $700,000 and liabilities of $300,000. The market value of Brianna Ltd's assets is $800,000. What is the amount of goodwill that James Ltd will recognise on acquisition?

a. $220,000.

b. $120,000.

c. $255,000

d. $155,000.

Q3. When non-current assets are disposed of during the year it is unnecessary to charge depreciation for the fractional portion of the year prior to disposal.

True

False

Q4. Under NZ IAS 36 'Impairment of Assets' it is true that:

a. Accumulated depreciation is written off against a depreciated asset before the write-down to recoverable amount.

b. Impairment losses are accounted for as decrements under the revaluation model.

c. All are true statements.

d. When an asset's carrying amount exceeds its recoverable amount the asset is said to suffer impairment.