Question

Scrambled simple accounting problems 1) Boulder Corp. has the following assets: Buildings and Equipment (net) Trade Receivables Inventory Land $12,500,000 1,600,000 2,300,000 1,500,000 The total amount reported under Property, plant, and Equipment would be $17,900,000. $14,000,000 $16,300,000 $20,500,000 The cost of a depreciable long-lived asset is expensed c in the period in which it is disposed of. when it is paid for. as the asset benefits the company. in the period in which it is acquired. Units-of-production is an appropriate depreciation method to use when it is impossible to determine the productivity of the asset. the asset's use will be constant over its useful life. the asset's use varies significantly from one period to another. the company is a manufacturing company. o

Please help and if possible explain a bit. Would help greatly.

Answer 1

1) The total amount reported under property, plant and equipment.

would be:

Ans: $14,000,000

Explanation:

( property, plant and equipment section includes long term assets such as land, building equipment etc. here, building& equipment and land only two lông term assets are given so we would add them to get the total of PPE.( $12,500,000+$15,00,000) and trade receivable ame inventory are current assets therefore not included in computation.)

2) The cost of depreciable long lived asset is expensed

Ans : As the assets benefits the company

Explanation:

( the cost of long lived asset is not expensed at one go i.e its not expensed on acquistion, payment or disposition. Instead it is expensed over a period of time i.e as the assets benefits the company , depreciation expense is written down every year to expense the long live assets.)

3) Units of production is an appropriate depreciation method when to

use

Ans: The asset's use varies significantly from one period to another

Explanation :

(as discussed above long term assets are depreciated  as and when its benefits the company. When use of asset varies significantly than unit of production is appropriate because it calculates the depreciation per unit of asset used.)