Presented below is information related to non-current assets owned by Marley Company at December 31, 2015.
Equipment Copyright
Cost $7 000 000 $2 700 000
Accumulated depreciation to date 1 500 000
Carrying amount - 2 350 000
Value-in-use 5 000 000
Fair value less cost of sell 4 400 000
Recoverable amount - 1 500 000
Assume that Marley will continue to use both assets in the future. As of December 31, 2015, the equipment had a remaining useful of 4 years and the copyrights had a remaining useful life of 5 years. Please show all workings and attach in order for me to copy and paste.Please and thank yiu.
Required:
(a) Prepare the journal entries (if any) to record the impairment of the assets at December 31, 2015. (16 marks)
(b) Prepare the journal entries to record depreciation and amortization expense for 2016. (14 marks)
(c) The recoverable amounts at December 31, 2016, of the equipment is $5 750 000 and the copyrights is $1 600 000. Prepare the journal entries (if any) necessary to account for impairment. (16 marks)
(d) What is the amount for depreciation and amortization for 2017? (6 marks)
Presented below is information related to non-current assets owned by Marley Company at December 31, 2015.
Equipment Copyright
Cost $7 000 000 $2 700 000
Accumulated depreciation to date 1 500 000
Carrying amount - 2 350 000
Value-in-use 5 000 000
Fair value less cost of sell 4 400 000
Recoverable amount - 1 500 000
Assume that Marley will continue to use both assets in the future. As of December 31, 2015, the equipment had a remaining useful of 4 years and the copyrights had a remaining useful life of 5 years. Please show all workings and attach in order for me to copy and paste.Please and thank yiu.
Required:
(a) Prepare the journal entries (if any) to record the impairment of the assets at December 31, 2015. (16 marks)
(b) Prepare the journal entries to record depreciation and amortization expense for 2016. (14 marks)
(c) The recoverable amounts at December 31, 2016, of the equipment is $5 750 000 and the copyrights is $1 600 000. Prepare the journal entries (if any) necessary to account for impairment. (16 marks)
(d) What is the amount for depreciation and amortization for 2017? (6 marks)
Related questions
NFORMATION
NUWARE LIMITED
|
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 R |
|
|
Cash flows from operating activities |
2 540 000 |
|
Profit before interest and tax |
7 700 000 |
|
Non-cash flow adjustments |
700 000 |
|
Add: Depreciation |
700 000 |
|
Profit before working capital changes Working capital changes |
8 400 000 690 000 |
|
Decrease in inventory Decrease in receivables Increase in payables |
180 000 310 000 200 000 |
|
Cash generated from operations |
9 090 000 |
|
Interest paid |
(150 000) |
|
Dividends paid |
(4 900 000) |
|
Company tax paid |
(1 500 000) |
|
Cash flow from investing activities |
(4 200 000) |
|
Land, buildings and equipment purchased |
(4 200 000) |
|
Cash flow from financing activities |
1 100 000 |
|
Increase in long-term borrowings |
1 100 000 |
|
Net decrease in cash and cash equivalents |
? |
|
Cash and cash equivalents at beginning of year |
? |
|
Cash and cash equivalents at end of year |
? |
- Why was depreciation included in computing the cash flow from operating activities? (2 marks)
- Calculate the cash balance on 31 December 2019 if there was a bank overdraft of R460 000 on 31 December 2020. (2 marks)
- Based on the cash flow information above, how does the company appear to be performing? Explain by referring to at least five items in the cash flow statement. (10 marks)
- Long term loans were increased during 2020. Was this the most appropriate way of financing the purchase of assets? (3 marks)
1.5 What cash receipts increase cash but not profits? (3 marks)
