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Tutorial 3

The document discusses depletion calculations for extracting natural resources and cost of goods sold. It also provides examples of accounting entries for unrealized gains and losses on land revaluation, impairment and recovery of impairment losses on land, amortization of trade names, and amortization of franchises.

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taha.hamed
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47 views3 pages

Tutorial 3

The document discusses depletion calculations for extracting natural resources and cost of goods sold. It also provides examples of accounting entries for unrealized gains and losses on land revaluation, impairment and recovery of impairment losses on land, amortization of trade names, and amortization of franchises.

Uploaded by

taha.hamed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

School of International Business Intermediate Accounting 2

Spring 2022-2023 Tutorial 3

a)

$850,000 + $170,000 + $40,000* – $100,000 = .08 depletion per unit


12,000,000

• 2,500,000 units extracted X $.08 = $200,000 depletion for 2010

b) 2,200,000 units sold X $.08 = $176,000 charged to cost of


goods soldfor 2010
School of International Business Intermediate Accounting 2
Spring 2022-2023 Tutorial 3

December 31, 2010

Land........................................................................................ 20,000
Unrealized Gain on Revaluation—Land ........... 20,000

December 31, 2011


Unrealized Gain on Revaluation—Land...................... 20,000
Loss on Impairment .......................................................... 20,000
Land .............................................................................. 40,000

December 31, 2012


Land........................................................................................ 25,000

Recovery of Impairment Loss .............................. 20,000


Unrealized Gain on Revaluation—Land ............ 5,000
School of International Business Intermediate Accounting 2
Spring 2022-2023 Tutorial 3

BRIEF EXERCISE 12-3

Trade Name ........................................................................... 68,000


Cash .............................................................................. 68,000

Trade Name Amortization Expense............................... 8,500


Trade Name (€68,000 X 1/8 = €8,500) .................. 8,500

BRIEF EXERCISE 12-4

Franchise.................................................................................... 120,000
Cash .................................................................................. 120,000

Franchise Amortization Expense ....................................... 11,250


Franchise ($120,000 X 1/8 X 9/12 = $11,250) ........ 11,250

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