ZuoTi.Pro
Question

Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company...

Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for five years. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.

Required:

A. Prepare journal entries for development costs for the years ending December 31, 2017, and December 31, 2018, under (1) IFRS and (2) U.S. GAAP.

B. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert IFRS balances to U.S. GAAP.

FOR PART A. Record the development costs as per IFRS. Record the development costs as per U.S. GAAP. Record the amortization as per IFRS. Record the amortization as per U.S. GAAP.

FOR PART B. Record the conversion entry needed for 12/31/17. Record the conversion entry needed for 12/31/18.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer

0 0
Add a comment
Know the answer?
Add Answer to:
Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate...

    Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert...

  • 28. Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which...

    28. Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 36 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. a. Determine the appropriate accounting for research and development costs for the years ending December 31, 2017, and December 31, 2018, under (1)...

  • Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30...

    Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS....

  • Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment...

    Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment was expected to have a useful life of six years and a residual value of $15,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $65,100, a salvage value of $15,000, and a remaining useful life of five years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Parnell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment...

    Parnell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment was expected to have a useful life of five years and a residual value of $13,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $75,700, a salvage value of $13,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Harrington Company was sued by an employee in late 2017. General counsel concluded that there was...

    Harrington Company was sued by an employee in late 2017. General counsel concluded that there was an 80 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $20,000 to $70,000, with no amount in the range more likely than any other. The lawsuit was settled in 2018, with Harrington making a payment of $60,000. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in...

  • Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 201,000 reais and...

    Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 201,000 reais and then leased it back under a 10-year lease agreement, which is accounted for as an operating lease. The building had a carrying amount of 159,400 reais and a fair value of 201,000 reais on the date of sale. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare...

  • CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The...

    CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment was expected to have a useful life of four years and a residual value of $11,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $67,100, a salvage value of $11,000, and a remaining useful life of three years. In measuring property, plant, and equipment subsequent to acquisition...

  • Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 231,000 reais and...

    Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 231,000 reais and then leased it back under a 10-year lease agreement, which is accounted for as an operating lease. The building had a carrying amount of 184,600 reais and a fair value of 231,000 reais on the date of sale. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare...

  • Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43, 100 markkas....

    Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43, 100 markkas. At December 31, 2017, the brand name could be sold for 35,700 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,160 markkas, and the present value of this amount is 34,700 markkas. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT