Ramshare Company acquired equipment at the beginning of 2015 at a cost of $135,000. The equipment has
Question:
Expected future cash flows from use of the equipment ...................................... $116,000
Present value of expected future cash flows from use of the equipment ................... 100,000
Fair value (net selling price), less costs to dispose ............................................ 96,600
a. Determine the amount at which Ramshare should carry this equipment on its December 31, 2015, balance sheet and the amount, if any, that it should report in net income related to this inventory using (1) U.S. GAAP and (2) IFRS.
b. Determine the adjustments that Ramshare would make in 2015 and 2016 to reconcile net income and stockholders' equity under U.S. GAAP to IFRS. Ignore the possibility of any additional impairment at the end of 2014?
GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Cost of equipment 135000 Salvage value zero Useful life 5 years Depreciation expense 2015 27000 Carrying value 123115 108000 Expected future cash flow...View the full answer
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Related Book For 
Advanced Accounting
ISBN: 978-0077862220
12th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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