Reference no: EM133113262

Question 1 - Details below are for a company who incurred research and development expense for an internally generated asset

Description Expense

Legal fees $2,000

General advertising and promotional costs 10,000

General administration and overhead 3,000

Staff software training 20,000

Cost of materials 25,000

Fees to register legal rights 5,000

Research phase 10,000

Total $75,000

What is the total amount that is eligible to be capitalized?

Question 2 - ABC Ltd. has carried out an impairment review of its Cars division

Property, plant and equipment $37,750

Intangible assets $5,750

Goodwill $2,750

Total $46,250

The fair value less costs of disposal and value in use have been estimated at $49,250 and $49,200, respectively.

How much is impairment loss?

Question 3 - Tyremart Inc provides a two-year warranty on winter tyres it manufactures below are the excerpts for Dec 2020

Sales 50,000 units

Sales $200 per unit

Historical trend is estimated to be 3% defect rate on sales

Replacement cost is determined to be 120,000

Warranty obligation as of Nov 2020 was $130,000

What is the warranty Expense for Dec 2020?

Question 4 - Carryover provide 3 year warranty on items it manufactures. Its accounting year is December

The cost of meeting its warranty obligation for the year were Parts 70,000

Labour 63,000

The sales during the year were 1,500,000

It estimates 4.5% of defects on sale

At the Beginning of the year warranty obligation was 90,000

What is the warranty Expense for the year?

Question 5 - Carryover provide 3 year warranty on items it manufactures. Its accounting year is December

The cost of meeting its warranty obligation for the year were

Parts 70,000

Labour 63,000

The sales during the year were 1,500,000

It estimates 4.5% of defects on sale

At the Beginning of the year warranty obligation was 90,000

What is the warranty Expense for the year?