Kuis Setelah UTS AK1 Ekstensi Feri Priatna

SOAL KUIS AK1 Setelah UTS

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Comprehensive PPE Problem
Darby Sporting Goods Inc. has been experiencing growth in the demand
for its products over the last several years. The last two Olympic Games
greatly increased the popularity of basketball around the world. As a
result, a European sports retailing consortium entered into an agreement
with Darbys Roundball Division to purchase basketballs and other
accessories on an increasing basis over the next 5 years.
To be able to meet the quantity commitments of this agreement, Darby
had to obtain additional manufacturing capacity. A real estate firm
located an available factory in close proximity to Darbys Roundball
manufacturing facility, and Darby agreed to purchase the factory and
used machinery from Encino Athletic Equipment Company on October 1,
2011. Renovations were necessary to convert the factory for Darbys
manufacturing use.
The terms of the agreement required Darby to pay Encino $50,000 when
renovations started on January 1, 2012, with the balance to be paid as
renovations were completed. The overall purchase price for the factory
and machinery was $400,000. The building renovations were contracted
to Malone Construction at $100,000. The payments made, as renovations
progressed during 2012, are shown below. The factory was placed in
service on January 1, 2013.
Jan 1
April
October
December
1
1
31
Encino 50,00 90,00 110,000
150,000
0
0
Malon
30,00
30,000
40,000
e
0
On January 1, 2012, Darby secured a $500,000 line-of-credit with a 12%
interest rate to finance the purchase cost of the factory and machinery,
and the renovation costs. Darby drew down on the line-of-credit to meet
the payment schedule shown above; this was Darbys only outstanding
loan during 2012.
Bob Sprague, Darbys controller, will capitalize the maximum allowable
interest costs for this project. Darbys policy regarding purchases of this
nature is to use the appraisal value of the land for book purposes and
prorate the balance of the purchase price over the remaining items. The
building had originally cost Encino $300,000 and had a net book value of
$50,000, while the machinery originally cost $125,000 and had a net
book value of $40,000 on the date of sale. The land was recorded on
Encinos books at $40,000. An appraisal, conducted by independent
appraisers at the time of acquisition, valued the land at $290,000, the
building at $105,000, and the machinery at $45,000.

Kuis Setelah UTS AK1 Ekstensi Feri Priatna

Angie Justice, chief engineer, estimated that the renovated plant would
be used for 15 years, with an estimated salvage value of $30,000. Justice
estimated that the productive machinery would have a remaining useful
life of 5 years and a salvage value of $3,000. Darbys depreciation policy
specifies the 200% declining-balance method for machinery and the
150% declining-balance method for the plant. One-half years
depreciation is taken in the year the plant is placed in service and onehalf year is allowed when the property is disposed of or retired. Darby
uses a 360-day year for calculating interest costs.
Instructions
a) Determine the amounts to be recorded on the books of Darby Sporting
Goods Inc. as of December 31, 2012, for each of the following
properties acquired from Encino Athletic Equipment Company. (1)
Land. (2) Buildings. (3) Machinery.
b) Calculate Darby Sporting Goods Inc.s 2013 depreciation expense, for
book purposes, for each of the properties acquired from Encino
Athletic Equipment Company.
c) Discuss the arguments for and against the capitalization of interest
costs.
Intangible Assets
PT AK has the following amounts included in its Statement of Financial
Position at December 31, 2009:
Patent
Less:
Accumulated
Amortization
Copyright
Less:
Accumulated
Amortization
Total

90.000.0
00
9.000.00
0
54.000.0
00
37.800.0
00

81.000.0
00

16.200.0
00
98.200.
000
PT AK purchased patent on January 1, 2009. AK estimated the remaining
useful life of the patent to be 10 years. AK uses cost method to measure
its intangible assets and straight line method to amrtize them. The
following transactions influence the intangible assets balance during
2010:
January 2
A License is purchased from PT ABC, distributor of a popular consumer
product, for 150.000.000. It is expected that this product will generate
cash flow for an indefinite period of time. The license has an initial term

Kuis Setelah UTS AK1 Ekstensi Feri Priatna

of 5 years but by paying a nominal fee, PT AK can renew the license
indefinitely for successive 5 year terms.
January-June
PT AK incurres research and development costs since January 20 of
315.000.000. Management estimates that about 40% of the costs are
allocated to research the new formula. The remaining is a development
cost.
September 1
PT AK pays 60.000.000 to advertize its product.
December 31
PT AK is doing impairment test for its intangible assets. PT AK has
received the following information related to its intangible assets:

Recoverable
Recoverable
Recoverable
Recoverable

amount
amount
amount
amount

Patent 70.000.000
Copyright 8.000.000
License 165.000.000
Patent new formula 175.000.000

Required:
1. Prepare the journal entry to record the transactions including
amortization. The company uses accumulated amortization
accounts.
2. Compute the carrying amount of each intangible assets on its
December 31, 2010, statement of financial position.
3. Prepare the journal entry to record the amortization for 2011.
Investment Property
Melody Property Limited owns a right to use land together with a
building from 2000 to 2046, and the carrying amount of the property was
$5 million with a revaluation surplus of $2 million at the end of 2006. No
revaluation was made in 2007. On 2 July 2008, when the fair value of the
property increased to $5.375 million, Melody signed a lease to rent out
the property for rental purposes.
Discuss the accounting treatment for this transfer and suggest journal
entries.

Non-current Assets Held for Sale

Kuis Setelah UTS AK1 Ekstensi Feri Priatna

MGA Manufacturing Limited is committed to a plan to sell
amanufacturing facility in its present condition and classifies the facility
as held for sale at year-end.
after a firm purchase commitmen is obtained, the buyers inspection of
the property identifis environmental damage not previously known to
exist. MGA is required by the buyer to make good the damage, which will
extend the period required to complete the sale beyond 1 year. owever,
MGA has initiated actions to make good the damage, and satisfactory
rectification of the damage is highly probable.
Discuss whether the disposal can still be classified as held for sale.

Current Liabilities, Provisions, and Contingency

PART A
The following situations relate to Bolivia Company.
1. Bolivia provides a warranty with all its products it sells. It estimates
that it will sell 1,000,000 units of its product for the year ended
December 31, 2012, and that its total revenue for the product will be
$100,000,000. It also estimates that 60% of the product will have no
defects, 30% will have major defects, and 10% will have minor
defects. The cost of a minor defect is estimated to be $5 for each
product sold, and the cost for a major defect cost is $15. The company
also estimates that the minimum amount of warranty expense will be
$2,000,000 and the maximum will be $10,000,000.
2. Bolivia is involved in a tax dispute with the tax authorities. The most
likely outcome of this dispute is that Bolivia will lose and have to pay
$400,000. The minimum it will lose is $20,000 and the maximum is
$2,500,000.
Instructions
Prepare the journal entry to record provisions, if any, for Bolivia at
December 31, 2012.
PART B
Kobayashi Corporation reports in the current liability section of its
statement of financial position at December 31, 2012 (its year-end),
short-term obligations of $15,000,000, which includes the current portion
of 12% long-term debt in the amount of $10,000,000 (matures in March
2013). Management has stated its intention to refinance the 12% debt
whereby no portion of it will mature during 2013. The date of issuance of
the financial statements is March 25, 2013.
Instructions
a) Is managements intent enough to support long-term classification of
the obligation in this situation?

Kuis Setelah UTS AK1 Ekstensi Feri Priatna

b) Assume that Kobayashi Corporation issues $13,000,000 of 10-year
debentures to the public in January 2013 and that management
intends to use the proceeds to liquidate the $10,000,000 debt
maturing in March 2013. Furthermore, assume that the debt maturing
in March 2013 is paid from these proceeds prior to the authorization
to issue the financial statements. Will this have any impact on the
statement of financial position classification at December 31, 2012?
Explain your answer.
c) Assume that Kobayashi Corporation issues ordinary shares to the
public in January and that management intends to entirely liquidate
the $10,000,000 debt maturing in March 2013 with the proceeds of
this equity securities issue. In light of these events, should the
$10,000,000 debt maturing in March 2013 be included in current
liabilities at December 31, 2012?
Employee Benefit
PT Berdikari has a defined benefit plan for its employees. The movement
on the defined benefit obligation and plant assets for the year is set out
below:

Liabilities (or
obligation)
Beg. Balance
Current Service
Cost
Interest Cost
Past Service Cost
Curtailment/Settle
ment
Actuarial Gain/Loss
Present Value of
Obligation

In Rp
000
9,000,00
0
1,800,00
0
?

Plan (scheme)
assets
Beg. Balance
Contribution Made

Expected return on
assets
90,000 Actuarial gain/loss
72,000 Fair Value of Plan
Assets
?
11,600,0
00

In Rp
000
8,550,0
00
900,000
?
?
9,810,0
00

PT Berdikari has recognized all cost, except for actuarial gain and loss.
Actuarial loss of only Rp150 mio has been recognized during the year.
Discount rate and expected rate of return on plan assets at start of year
are 6% and 7% respectively.
Instructions:

Kuis Setelah UTS AK1 Ekstensi Feri Priatna

1. Calculate the amount recognized in the statement of financial position
and reconcile it to the present value of defined benefit obligation.
2. Calculate the amount charge to profit and loss.
3. Prepare the journal entry related to employee benefit in current year.