Prob.

1 Total caledar year revenue 45,000,000

Total expenses 37,000,000
Accrual of termination cost 1,000,000
Impairment loss on writedown to FV - C2S 2,000,000
Before tax P/L and remeasurement to FV-C2S 5,000,000
Tax expense 1,500,000
Income from discontinued operation 3,500,000 C

Prob. 2 Realized operating and disposal loss 8,500,000 B

Prob. 3 FV - C2S (3.5M - 100k) 3,400,000

Less: CA 5,000,000
Impairment loss (1,600,000) A

Selling price 2,500,000

Less: CA after reclassification 3,400,000
Loss on disposal (900,000) D

Prob. 4 FV - C2S (5.5M - 100k) 5,400,000 C

Less: CA under revaluation model 5,500,000
Impairment loss (100,000)

Selling price 6,000,000

Less: CA after reclassification 5,400,000
Gain on disposal 600,000 D

Prob. 5 Cost 5,000,000

Less: 2017 Depreciation 1,000,000
CA before reclassification 4,000,000 B

FV - C2S 3,500,000
Less: CA 4,000,000
Impairment loss (500,000) C

Recoverable amount (lower than 3M CA if not reclass'd) 2,700,000

Less: CA 3,500,000
2018 Loss (800,000) B

CA 1/1/19 2,700,000
Less: 2019 Depreciation (2.7M / 3) 900,000
CA 12/31/19 1,800,000 B
Prob 1. Segments A, B, C and E pass the revenue test of 3.3M
Segment D passes the asset test of 6.6M

Answer: C

Prob. 2 The combined profit of 11M is greater in absolute amount than the combined loss

Segments 1, 2 and 3 are reportable because they have profit or loss of at least 1.1M

Prob. 3 Minimum sale to major customer (50M x 10%)

Required external revenue of reportable segments (50 M x 75%)

Prob. 4 10% of total internal and external revenue (52M x 10%)

Prob. 5 Revenue
Traceable cost
Indirect cost allocated (1.8M x 3M/12M)
Interest and taxes allocated (1M x 25%)
Profit of C

Prob. 5 Total losses (800 + 100)

Expenses incurred for the quarter ( 300 + 150)
Expenses to be allocated (200 + 500 + 600 + 1.2M )/ 4
Total

Prob. 6 Unadjusted NI
Allocated gain that shoud have been recognized in full in 2nd quarter
Change in inventory valuation
Adjusted NI

Prob. 7 Total tax expense for 3 quarters (20M x 25%)

Less: tax expense recognized in 2 quarters (13M x 30%)
3rd Quarter Tax expense
 C

5,000,000 A

37,500,000 D

5,200,000 C

3,000,000
(1,500,000)
(450,000)
(250,000)
800,000 C

900,000
450,000
625,000
1,975,000 A

950,000
(200,000)
160,000
910,000 D

5,000,000
3,900,000
1,100,000 C
1 Cash in bank (5M + 1M) 6,000,000
Treasury bills 2,500,000
Cash and cash equivalents 8,500,000

2 Cash in bank (5M - 500 + 1M) 5,500,000

PCF 50,000
Treasury bills 1,500,000
Savings deposit 800,000
Cash and cash equivalents 7,850,000

3 Cash on hand (500 - 100) 400,000

Current account 4,000,000
Payroll account 1,000,000
Sinking fund cash Bonds are due in 2017 1,500,000
Managers check 200,000
Traveler's check 300,000
Money order 100,000
Total cash 7,500,000

Cash equivalent in the form of 3 month time deposit 2,500,000

4 AR Beginning 2,000,000
Sales 10,000,000
Collections (8,000,000)
Sales returns (100,000)
Writeoffs (500,000)
AR End 3,400,000
Less: Allowance for sales returns and doubtful accounts 450,000
NRV 2,950,000

5 Total writeoff 1,700,000

Less: Total recovery 220,000
Net bad debts 1,480,000
Divide by total credit sales 37,000,000
Hstorical average bad debts rate 4%

Allow. for doubtful accounts 1/1/11 1,000,000

Write-offs (650,000)
Recoveries 150,000
Balance before adjustment 500,000
Doubtful accounts expense/provision 800,000
Required allowance per aging 1,300,000

6 Balance before adjustment (debit) (40,000)

Provision (SQUEEZED) hahahaha 190,000
Required allowance at 3% of 5M 150,000
7 Allow. for doubtful accounts 1/1/11 1,000,000
Total Write-off (200 + 100) (300,000)
Recovery 50,000
Balance before adjustment excluding interim provision 750,000
Doubtful accounts expense/provision 900,000
Required allowance per aging 1,650,000

Total doubtful accounts expense 900,000

Less: Interim provision at 2% of 20M 400,000
Year end adjustment to allowance (credit) 500,000

AR balance 9,900,000
Required allowance per aging (1,650,000)
NRV 8,250,000
B

A
A

A
A
C
A

B
1.1 AR - Assigned 5,000,000
AR collected with discount (2,000,000)
Sales returns (100,000)
Assigned accounts written off (300,000)
Balance of AR - Assigned 2,600,000 B

1.2 Loan face value (5M x 80%) 4,000,000

Less: Collections (2M - 200T) 1,800,000
Less: Interest (4M x 1%) 40,000 1,760,000
Carrying amount of notes payable 2,240,000 A

1.3 Equity in Assigned Accounts (2.6M - 2.24M) 360,000 C

2.1 AR factored 5,000,000

Service fee (5M x 5%) (250,000)
Factor's holdback (5M x 10%) (500,000)
Interest (5M x 15% x 30/365) (49,315)
Net proceeds 4,200,685 D

2.2 Service fee 250,000

Interest Expense 49,315
Loss on Factoring 299,315 A

3 Principal 4,000,000
Interest at maturity (4M x 12% x 90/360) 120,000
Maturity value 4,120,000
Less: Discount (4.12M x 15% x 60/360) 103,000
Proceeds from discounting 4,017,000 A
Less: Principal and interest receivable (4M + (4M x .12 x 30/360)) 4,040,000
Loss on discounting (23,000) B

5 Principal 6,000,000
Interest at maturity (6M x 10% x 9/12) 450,000
Maturity value 6,450,000
Less: Discount (6.45M x 12% x 6/12) 387,000
Proceeds from discounting 6,063,000 A
Less: Principal and interest receivable (6M + (6M x .10 x 3/12)) 6,150,000
Loss on discounting (87,000) C

Maturity Value 6,450,000

Protest fee 50,000
Total amount paid to note buyer 6,500,000
Interest Income from maker (6.5M x 12 x 3/12) 195,000
Total amount collected from customer 6,695,000 C
DR. Cash 6,063,000
DR. Interest Expense 87,000 B
CR. Notes Payable 6,000,000
CR. Interst Income 150,000
1 PV of note and selling price (6M x .75) 4,500,000
Less: Carrying amount 4,800,000
Loss on sale (300,000) D

2017 Interest income / Discount amort. (4.5M x 10%) 450,000 C

2 PV or CA of note on 1/1/17 (500T x 5.65) 2,825,000 B

Discount amortization / 2017 Interest Income (2.825M x 12%) 339,000 B
Collection (500,000)
PV or CA of note on 12/31/17 2,664,000 C

PV of note or selling price 2,825,000

Less: Carrying amount 2,000,000
Gain on sale 825,000 C

3 Total receivable (7.5M + (7.5M x 12%)) 8,400,000

Less: PV of cashflows 5,225,000 A
Loan impairment loss 3,175,000 B

Interest income or amortization (5,225,000 x 12%) 627,000 A

Loan receivable 12/31/17 7,000,000

Less: Allowance for loan impairment 1,648,000
CA 12/31/18 5,352,000 A
1 Correct amount 6,100,000 B

2 Invoice price plus import duties and other direct cost 6,300,000 A

3 Mark up on goods out on consignment 400,000

Goods purchased FOB destination 1,200,000
Goods held on consignment 900,000
Total reduction 2,500,000 D

4 Gross sales (5M x 80% x 90%) 3,600,000

Sales discounts (3.6M x 5%) -180,000
Prepaid freight 100,000
Full remittance 3,520,000 D

5 Net Method 4,900,000

C&B
Gross Method 4,940,000

6 Unadjusted accounts payable 2,200,000

Lost goods purchased FOB SP 40,000
Purchased returns -70,000
Correction of debit balance 500,000
Adjusted accounts payable 2,670,000 D

7 Net sales 2,015,000 B

8 Sales revenue on inventory delivered 2,500,000 B

1 Beginning Inventory 1,500,000
Net purchases (1.8M + 800T - 400T) 2,200,000
TGAS 3,700,000
Less: Ending inventory (6,000 x 180) + (2,000 x 200) 1,480,000
COGS 2,220,000

Beginning inventory 1,500,000

Purchases 1,800,000
Total 3,300,000
Less: Cost of sales (14,000 x 165) 2,310,000
Balance 990,000
Net purchases (2000 x 200) 400,000
Ending inventory 1,390,000

Beginning Inventory 1,500,000

Net purchases (1.8M + 800T - 400T) 2,200,000
TGAS 3,700,000
Less: Ending inventory (8,000 x 168.18*) 1,345,440
COGS 2,354,560

*Weighted average cost 168.18

2 Beginning inventory 3,000,000

Purchases 9,000,000
TGAS 12,000,000
Less: Ending inventory 4,000,000
COGS before writedown 8,000,000
Loss on writedown (4M - 3.7M) - (3M - 2.9M) 200,000
COGS 8,200,000

3 Allowance for inventory writedown before adjustment 500,000

Reduction in Allowance or Gain on reversal -300,000
Required allowance 200,000

COGS under direct method (3.5M + 20M - 4.8M) 18,700,000

5 LCNRV Individual 7,625,000

LCNRV Category 7,725,000

LCNRV Total 7,875,000

6 12/31 FV (50 x 100,000) 5,000,000

PC price 5,500,000
Loss on PC -500,000
 3/31 FV (53 x 100,000) 5,300,000
12/31 FV 5,000,000
Gain 300,000

7 Purchase price 12,000,000

Conversion cost 3,000,000
Total 15,000,000

Selling price of class A lots 24,000,000

Selling price of class B lots 16,000,000
Selling price of class C lots 20,000,000
Total selling price 60,000,000

RELATIVE SALES PRICE METHOD OF ALLOCATING COST

Class A 6,000,000
Class B 4,000,000
Class C 5,000,000
Total 15,000,000
1. A

165.00

3. B 173.75 4. A

2. A

A
3. B

2. B

C
1 Beginning inventory 5,000,000
Net Purchases (26 + 2 - 3.5 - 1.5) 23,000,000
TGAS 28,000,000
Less: Estimated COS
Net Sales 37,000,000
Less: Gross Profit (37M x 40%) 14,800,000 22,200,000
Estimated ending inventory 5,800,000
Physical count (4,000,000)
Cost of goods out on consignment (1.M * 40%) (600,000)
Estimated cost of missing inventory 1,200,000 C

2 GAS at cost 7,100,000

Less: Estimated COS (7,280,000 / 130%) 5,600,000
Estimated EI 1,500,000
Less: NRV of damaged goods 100,000
Fire Loss 1,400,000 B

3 Beginning inventory 600,000

Purchases 4,300,000
TGAS 4,900,000
Less: Estimated COS
Sales 5,600,000
Less: Gross Profit (5.6M x (2.25/9M)) 1,400,000 4,200,000
Estimated ending inventory 700,000
NRV of damaged goods (25,000)
Cost of undamaged goods (60,000 x (6.75/9M)) (45,000)
Estimated Fire Loss 630,000 C

4 GAS at retail (1.2M + 14.7M 500 + 300 + 300 1M) 15,000,000

Less: Estimated losses (600 + 400) 1,000,000
Balance of GAS at retail 14,000,000
Less: Net sales (9.5M + 500) 10,000,000
Ending inventory at retail 4,000,000
Cost ratio under conservative (9,600,000 / 16,000,000) 60.00%
Estimated cost of inventory 2,400,000 A

GAS at retail (1.2M + 14.7M 500 + 300 + 300 1M) 15,000,000

Less: Estimated losses (600 + 400) 1,000,000
Balance of GAS at retail 14,000,000
Less: Net sales (9.5M + 500) 10,000,000
Ending inventory at retail 4,000,000
Cost ratio under average (9,600,000 / 15,000,000) 64.00%
Estimated cost of inventory 2,560,000 A

5 GAS at retail (2M + 8M 1.5M + 500) 11,000,000

Less: Net sales 7,500,000
Ending inventory at retail 3,500,000
Cost ratio under FIFO (5,850,000 / 9,000,000) 65.00%
Estimated cost of inventory 2,275,000 A
LIFO Method as supplement

Purchases at retail (8M + 1.5M 500) 9,000,000

Less: Net sales 7,500,000
Remaining purchases at retail 1,500,000
Cost ratio under LIFO (5,850,000 / 9,000,000) 65.00%
Remaining purchases at cost 975,000
Beginning inventory at cost 1,400,000
Estimated cost of inventory 2,375,000 B
1 Gain on BA from net increase in FV (2M + 400T - 150K) 2,150,000 B

Gain on the harvest of AP 850,000 C

CA of BA on 12/31 (5M + net gain of 2,150,000) 7,150,000 C

2 Trees and Bearer animals and AP growing on BP 7,800,000 A

PPE including Bearer Plants 3,400,000 C

1 Aggrgate market value of held for trading securities 3,200,000
Less: Aggregate cost 3,600,000
Loss in income statement (400,000) C

2 Aggrgate market value of held for trading securities 5,800,000

Less: Aggregate cost 6,000,000
Loss in income statement (200,000) A

Selling price of Security A 1,900,000

Less: Carrying Amount 1,200,000
Gain on sale in P/L 700,000 B

Note that transaction cost of 600k is an expense

3 Aggrgate market value of FVOCI 8,600,000

Less: Aggregate cost 7,700,000
Unrealized gain in OCI 900,000 C

Selling price of Security C 5,200,000

Less: Carrying Amount 4,700,000
Gain on CA 500,000
Reclassification UG to RE 300,000
Total credit to RE 800,000 C

4 Cash dividend 1,500,000

Cash in lieu of stock dividend 750,000
Total dividend income 2,250,000 B

5 Property dividend (100,000 / 4 ) x P10 250,000 D

6 Cost of stock rights (50,000 x 10) 500,000

Exercise price (10,000 x 140) 1,400,000
Cost of new shares acquired 1,900,000 B

7 Theoretical value of stock rights 5

Cost of stock rights (50,000 x 5) 250,000

Exercise price (12,500 x 100) 1,250,000
Cost of new shares acquired 1,500,000 A
1 Cost of the investment 5,000,000
Less: BV of investment acquired (10M x 40%) 4,000,000
Difference of cost over BV 1,000,000
Allocation:
Land (2M x 40%) -800,000
Inventory (1.5M x 40%) -600,000 (1,400,000)
Gain on bargain purchase (400,000)

Share in net income (8M x 40%) 3,200,000

Amortization of land sold (800,000)
Amortization of inventory (300,000)
Gain on bargain purchase 400,000
Investment income 2,500,000 C

Cost of the investment 5,000,000

Investment income 2,500,000
Dividends (1,000,000)
CA 12/31 6,500,000 A

2 Share in net income (8M x 40%) 3,200,000

Deferred profit from inventory (5M - 3M) x 40% (800,000)
Deferred gain on sale from equipment (4M - 2.5M) x 40% (600,000)
Realized gain from depreciation ((4M - 2.5M) / 5) x 40% 120,000
Investment income 1,920,000 A

3 Net income 8,000,000

Less: Dividends on preference shares (500,000)
Net income to ordinary shareholders 7,500,000
Multiply by 20%
Investment income 1,500,000 B

4 Dividend or Investment income in 2017 (1M x 10%) 100,000 B

FV of 10% interest 3,500,000

2018 Acquisition cost 8,500,000
Total purchase price 12,000,000
Less: FV of NA acquired (36M + 4M) x 25% 10,000,000
GW 2,000,000 B

Gain on remeasurement to FV of 10% interest 500,000

Net Investment Income (2M - (4M x 25% / 4 years) 1,800,000
Total 2017 income 2,300,000 C

1/1 CA 12,000,000
Inv. Income 1,800,000
 Dividends (1,250,000)
12/31 CA 12,550,000 A

5 Cost of 30% investment 2,000,000

Share in 2017 net income 240,000
Dividends received (150,000)
Carrying amount December 31, 2017 2,090,000
Share in 2018 6 mos.NI 300,000
CA on 7/1/18 2,390,000 A

Selling price 1,500,000

Carrying amount of retained investment (2.39M x 50%) 1,195,000
Total 2,695,000
Less: Total carrying amount at date of sale 2,390,000
Gain on sale 305,000 B

FV on 7/1 of retained investment 1,600,000

Less: CA of retained investment 1,195,000
Gain from remeasurement 405,000
2017 Investment income 300,000
Gain on sale 305,000
Dividend Income 150,000
Unrealized gain on trading securities 400,000
Total Income 1,560,000 A
1 2017 Effective interest income 453,000 C
Less: Nominal interest 400,000
Amortization 53,000
1/1 CA 4,530,000
12/31/17 CA 4,583,000 B

2 6 mos. 2017 Interest Income 239,600 B

Less: Nominal interest 250,000
Amortization (10,400)
1/1 CA 5,990,000
12/31/16 CA 5,979,600 C

3 Unrealized gain in P/L (5.75M - 5.4M) 350,000 C

Nominal interest income 600,000 A

Carrying amount FV of investment 5,750,000 A

4 2017 2018 2019

Effective interest 373,488 379,367 385,716
Less: Nominal interest (5M x 6%) 300,000 300,000 300,000
Discount amortization 73,488 79,367 85,716

Cost 4,668,600
2017 Discount amortization 73,488
2017 Unrealized gain (SQUEEZED) 507,912 C
FV on 12/31/16 5,250,000
2018 Discount amortization 79,367
2018 Unrealized gain (SQUEEZED) 170,633 C
FV on 12/31/17 5,500,000

Cumulative UG in OCI 678,545 B

FV on reclassification 5,500,000
Elimination of UG in OCI -678,545
CA at amotized cost on 1/1/19 4,821,455
Effective interest based on original rate 385,716 C
Nominal interest (300,000)
CA at amotized cost on 1/31/19 4,907,171 C
1 Interest rate swap receivable 89,000 A

Net interest (600 - 100) 500,000 B

2 Interest rate swap payable 2016 -534,000 D

Interest rate swap payable 2017 -178,000 B
Interest expense (300 + 200) 500,000 A

3 Forward contract receivable 250,000 C

4 Call option receivable 500,000 A

Cash settlement (15 x 50k) 750,000 A
Net purchases (5.75M - 700k) 5,050,000 C
Loss on call option (unexercised) 50,000 C
Liability None D
1 Investment property 9,000,000 D

PPE 6,000,000 C

2 Selling price 2,900,000

Less: CA
Cost 2,200,000
Less: AD (2.2M / 40 x 3) 165,000 2,035,000
Gain on sale 865,000 A

3 FV on 12/31/18 9,700,000
Less: FV on 12/31/17 10,100,000
Loss on FV adjustment -400,000 B

4 Annual deposit (20M / 4.78) 4,184,100 B

5 Premium Paid 100,000

Increase in CSV -10,000
Dividends on Insurance Policy (received) -5,000
Net Life Insurance Expense 85,000 C

6 Premium Paid 90,000

Increase in CSV with dividends that was applied -40,000
Net Life Insurance Expense 50,000 B

7 Cash surrender value on 12/31/17 75,000

Adjustment of CSV on 10/31/17 (95T - 75T) x 9/12 15,000
Total 90,000

Proceeds from life insurance 2,000,000

Less: Adjusted CSV 90,000
Unused Life insurance payment (160,000 x 3/12) 40,000 130,000
Gain from life insurance 1,870,000 B

Life insurance expense 105,000 D

Prob 1
Q1 FV of Land from issuance of shares 6,000,000
FV of donated Land 1,000,000
Total 7,000,000 A

Q2 Price net of discount 2,700,000

Cash price of machine with down payment and Installments 4,700,000
PV of note 1 1,585,000
PV of note 2 1,360,000
FV given plus cash paid 2,300,000
Total 12,645,000 B

Q3 Total payment less cash price (5.5M - 4.7M) 800,000

Interest on note 1 (1.585M x 10%) 158,500
Interest on note 2 (1.36M x 10%) 136,000
Total 1,094,500 A

Prob 2
Q1 BV of asset exchanged 5,000,000
Cash paid 1,500,000
Cost of oil inventory 6,500,000 B

Q2 BV of asset exchanged 6,000,000

Less: Cash received 1,500,000
Cost of oil inventory 4,500,000 A

3 Income from governent grant (500k / 5) 100,000

Repayment of government grant 500,000

Less: Balance of liability on gov't grant 1/1/19 (500k - 200k) 300,000
Loss on repayment 200,000 C

4.1 Cost 6,600,000

Less: Gov't grant 600,000
Carrying amount 6,000,000
Less: Residual value 500,000
Depreciable amount 5,500,000
Divide by 5
Depreciation expense 1,100,000

Unrecognized depreciation on repayment (600k / 5 x 2) 240,000

Depreciation on government grant (600k / 5) 120,000
Depreciation on net cost (as above) 1,100,000
2018 Depreciation 1,460,000 A

4.2 Depreciation on government grant (600k / 5) 120,000

 Depreciation on net cost (as above) 1,100,000
2019 Depreciation 1,220,000 D

5 Proceeds from loan 5,000,000

Less: PV of note 3,750,000
Discount and deferred income on government grant 1,250,000 D
 1 Land as investment property (single account for land and bldg) 4,300,000 D

Prob. 2
Q1 Land 4,550,000 A
Q2 Building 9,700,000 A
Q3 Land improvement 950,000 A

3 Cost of the machine 1,200,000 C

4 NET borrowing cost from specific borrowing 900,000

Interest on 12% bonds 3,600,000

Interest on 8% note payable 800,000
Total borrowing cost 4,400,000
Divide by total principal 40,000,000
Capitalization rate* 11%

Average expenditures 15,000,000

Less: Specific borrowings 10,000,000
Average expenditures from general 5,000,000
Multiplied by capitalization rate* 11%
Capitalizable borrowing cost from general 550,000
Borrowing cost from specific borrowing 900,000
Interest cpitalized 1,450,000 B

4.2 Interest expense on GB (4.4M - 550k) 3,850,000 C

5.1 Jan. 1, 2017 Ave. Expenditure 4,000,000

July. 1, 2017 Ave. Expenditure 3,750,000
November. 1, 2017 Ave. Expenditure 250,000
Total 8,000,000

Borrowing cost from specific borrowing (3M x 10%) 300,000

Borrowing cost from general borrowing (8m - 3m) x 12% 600,000
Total capitalizable borrowing cost 900,000
2017 Expenditures 12,000,000
Total cost of building 12/31/17 12,900,000

Jan. 1, 2018 Ave Expenditures 12,900,000

March 1, 2018 Ave Expenditures 5,000,000
Total 17,900,000

Borrowing cost from specific borrowing 300,000

Borrowing cost from general borrowing 1,788,000
Total capitaliable borrowing cost 2,088,000
 2018 Expenditures 6,000,000
Total 2018 cost 8,088,000
2017 cost 12,900,000
Total cost of building 12/31/18 20,988,000 B

5.2 Total interest on General borrowing (25M x 12%) 3,000,000

Less: Amount capitalized 1,788,000
Interest expense 1,212,000 C
1 Sale Price 2,500,000
Less: Carrying amount - July 1, 2016
Cost 4,200,000
Less: Accum. Depr. (4.2M - 200k) / 5 x 3 2,400,000 1,800,000
Gain on sale 700,000 A

2 Annual depreciation A 250,000

Annual depreciation B 120,000
Annual depreciation C 80,000
Total 450,000

Composite Life (Total depreciable amount divided by total depr.) 16 B

3 Cost 3,300,000
Less: Residual value 300,000
Depreciable amount 3,000,000

SYD 15

1st year depreciation 1,000,000

2nd year depreciation 800,000

2017 Depreciation 750,000

2018 Depreciation (1M x 3/12) + (800k x 9/12) 850,000 A
12/31/18 Accumulated depreciation 1,600,000

4 2017 Depr. (5M x 40%) 2,000,000

2018 Depr. (5m - 2M) x 40% 1,200,000
2019 Depr. ((5M - 3.2M) - 600k) / 3 years 400,000
Accumulated Depreciation 3,600,000 D

5 Depreciable amount (240k / 8 over 55) 1,650,000

RV 50,000
Total cost 1,700,000 B

6 Total cost of wasting asset 31,800,000

Less: Residual value 3,000,000
Depletion Base 28,800,000

Rate (31.8M - 3M) / 1.2M tons 24

Depletion in cost of sales 1,440,000 B

7 Units extracted 3,000,000

Remaining 7,000,000
Total estimated output 2017 10,000,000

Units extracted 2,500,000

Remaining 3,500,000
Total estimated output 2018 6,000,000
 Total cost of wasting asset 35,000,000
Less: Residual value 5,000,000
Depletion Base 30,000,000

2017 rate (30M / 10M) 3.00

2017 Depletion 9,000,000 D

Depletion Base Balance 30,000,000

Less: 2017 Depletion 9,000,000
Depletion Base Balance 21,000,000

2018 rate (21M / 6M) 3.50

2018 Depletion 8,750,000 D

7 2017 Depletion (12M / 1.5M) x 25,000 x 6 months 1,200,000 B

2017 Depreciation (9.5M - 500k) / 1.5M x 25,000 x 6 mos. 900,000 C

1.1 Revalued amount 17,000,000
Less: Carrying amount 11,000,000
Pretax Revaluation surplus 1/1 6,000,000 A
Less: Realization 1,200,000
1.2 Pretax Revaluation surplus 12/31 4,800,000 B

1.3 2017 Depreciation (17M - 4M) / 5 years 2,600,000 A

Land Building
2.1 Revalued amount 15,000,000 70,000,000
Less: Carying amount 10,000,000 42,000,000
Pretax Revaluation surplus 1/1 5,000,000 28,000,000
Less: Deferred tax liability (6M x 30%) 1,500,000 8,400,000
Post tax Revaluation surplus 3,500,000 19,600,000
Less: Realization 1,400,000
2.2 Revaluation surplus 12/31 3,500,000 18,200,000

2.3 2017 Depreciation (70M / 14) 5,000,000 A

3 Cost 9,000,000
Less: Accumulated Depreciation 3,000,000
Carrying amount 12/31/17 6,000,000

Recoverable amount 4,500,000

Less: CA 6,000,000
Impairment loss -1,500,000 A

4.1 Carrying amount of CGU 10,000,000

Less: Recoverable amount 8,000,000
Impairment loss 2,000,000
Less: Impairment loss on building 500,000 B
Impairment loss to eqpt & inventory 1,500,000
Ratio of equipment to total CA 3/5
4.2 Impaiment loss to equipment 900,000 B

4.3 Impairment loss to inventory (1.5M x 2/5) 600,000 B

5.1 Recoverable amount 8,550,000

Less:CA (10M - 1M) 9,000,000
Impairment loss -450,000 B

5.2 CA if impairment not recognized 8,000,000

Less: CA 12/31/18 7,600,000
Gain on impairment recovery 400,000 A
5.3 2019 Depreciation (8M / 8 years) 1,000,000 A
 Total
85,000,000
52,000,000
33,000,000
9,900,000
23,100,000 B
1,400,000
21,700,000 D