S Company

JAY Co.

Land

100,000.00
Cash

Date
11-Jan
1-Mar
1-May
31-Dec
Total

General Borrowing
100,000.00

Payment
110,000.00
300,000.00
540,000.00
450,000.00
1,400,000.00

Specific Borrowing:
General Borrowing:
Average Expenditures
Amount related to Specific Borrowing
Amount related to General Borrowing
Total Capitalizable Borrowing Costs
Interest Expense
Cash
Building
Interest Expense
Cash

Amount of Loan
5,000,000.00
4,000,000.00
1,600,000.00
10,600,000.00

Average Expenditure
110,000.00
250,000.00
360,000.00
720,000.00

Capitalization Rate
112,500.00
720,000.00
(750,000.00)
-

239,500.00
239,500.00
1,512,500.00
112,500.00
1,400,000.00

112,500.00

Specific Borrowing
Actual Interest Incurred
Investment Income
Total Capitalizable Borrowing

Total Capitalizable Cost of Buil

2001
Jan. 1
Mar. 1
Jul. 1
Sept. 30
Dec. 1
Total

Specific Borrowing
General Borrowing
Average Expenditure
Amount related to Speci
Amount related to Gene
Capitalizable Borrowing
Total Capitalizable Borrowing
Journal Entries:
2000
Jan. 01

Dec. 31

2001
Jan. 01

Mar. 01

Jul. 01

Sept. 30

Dec. 01

Dec. 31

al Borrowing
Interest
600,000.00
520,000.00
160,000.00
1,280,000.00

lization Rate

12.08%

c Borrowing
Actual Interest Incurred
nvestment Income
Capitalizable Borrowing Costs

200,000.00
(25,000.00)

Capitalizable Cost of Building

Expenditure
1,675,000.00
600,000.00
800,000.00
900,000.00
1,200,000.00
5,175,000.00

1,675,000.00
Ave. Expenditure
1,675,000.00
500,000.00
400,000.00
225,000.00
100,000.00
2,900,000.00

c Borrowing
al Borrowing
Average Expenditure
Amount related to Specific Borrowing
Amount related to General Borrowing
Capitalizable Borrowing Costs
Capitalizable Borrowing Costs

2,900,000.00
(2,000,000.00)
900,000.00

Cash

200,000.00

2,000,000.00

200,000.00

108,679.25
308,679.25

Loans Payable
CIP

175,000.00
175,000.00

2,000,000.00
1,500,000.00

Cash
Interest Expense

1,500,000.00
200,000.00

Cash
CIP

200,000.00
200,000.00

Interest Expense

Cash

200,000.00

10,600,000.00
Loans Payable

CIP

10,600,000.00
600,000.00

Cash

600,000.00

Interest Expense
Cash

300,000.00

CIP

800,000.00

300,000.00

Cash
CIP

800,000.00
900,000.00

Cash
CIP

900,000.00
1,200,000.00

Cash
Interest Expense
Cash
CIP

1,200,000.00
1,180,000.00
1,180,000.00
308,679.25

Interest Expense
Building
CIP

308,679.25
5,483,679.25
5,483,679.25

Investors Galore, Inc.

Under the Fair Value Model:
20X1
20X2
20X3
20X4

no effect
20M - Gain
5M - Gain
10M - Loss

Under the Cost Model:

Annual Depreciation
20X1
20X2
20X3
20X4

9,000,000.00

no effect
9M - Expense
9M - Expense
9M - Expense

Kamandag Coporation
(1) Rental Expense - 2008
(2) Gain from Changes in FV
Rental Expense
Net Income

400,000.00
(10,000,000.00)
400,000.00
(9,600,000.00)

Herces, Inc.
Land

200,000.00
Revaluation Surplus

Equipment
Accumulated Depreciation
BV/SV/RS

Revaluation of Non-depreciable Asset

200,000.00

Cost
Replacement Cost
7,000,000.00
8,333,333.33
(2,800,000.00)
(3,333,333.33)
4,200,000.00
5,000,000.00

Building
1,333,333.33
Accumulated Depreciation
Revaluation surplus
Land

Revaluation of Depreciable Asset

533,333.33
800,000.00

1,000,000.00
Revaluation Surplus

Increase
1,333,333.33
(533,333.33)
800,000.00

Revaluation and Subsequent Impairment

1,000,000.00

Revalued Downward to 1,600,000

Revalution Surplus
Land

400,000.00
400,000.00

Revalued Downward to 800,000

Revaluation Surplus
Impairment Loss
Land

Building
Accumulated Depreciation
BV/SV/RS
Revaluation Loss
Accumulated Depreciation
Building

Building
Accumulated Depreciation
BV/RS/SV
Building
Accumulated Depreciation
Revaluation Gain

1,000,000.00
200,000.00
1,200,000.00
Cost
Replacement Cost
3,000,000.00
2,444,444.44
(300,000.00)
(244,444.44)
2,700,000.00
2,200,000.00
500,000.00
55,555.56

Decrease
555,555.56
(55,555.56)
500,000.00
Revaluation Decrease and Subsequent Increase

555,555.56
Cost
Replacement Cost
2,444,444.44
2,811,111.11
(444,444.44)
(511,111.11)
2,000,000.00
2,300,000.00
366,666.67
66,666.67
300,000.00

Increase
366,666.67
(66,666.67)
300,000.00

Building
Accumulated Depreciation
BV/RS/SV
Building
Accumulated Depreciation
Revaluation Gain
Revaluation Surplus

Cost
Replacement Cost
2,444,444.44
3,422,222.22
(444,444.44)
(622,222.22)
2,000,000.00
2,800,000.00
977,777.78
177,777.78
500,000.00
300,000.00

Increase
977,777.78
(177,777.78)
800,000.00

Hyuncy Company

Building
Accumulated Depreciation
BV/SV/RS
Building
Accumulated Depreciation
Revaluation Surplus

10,500,000.00

Depreciation Expense
Accumulated Depreciation

1,531,250.00

t Impairment

ubsequent Increase

Cost
Replacement Cost
15,750,000.00
26,250,000.00
(4,725,000.00)
(7,875,000.00)
11,025,000.00
18,375,000.00

Building
Residual Value
Depreciable Cost
Accumulated Depreciation
BV/SV/RS

Increase
10,500,000.00
(3,150,000.00)
7,350,000.00

3,150,000.00
7,350,000.00

1,531,250.00
Cost
Replacement Cost
15,750,000.00
26,250,000.00
(700,000.00)
(700,000.00)
15,050,000.00
25,550,000.00
(4,780,588.24)
(8,115,882.35)
10,269,411.76
17,434,117.65

Building
Accumulated Depreciation
Revaluation Surplus

10,500,000.00

Depreciation Expense
Accumulated Depreciation

1,452,843.14

3,335,294.12
7,164,705.88

1,452,843.14

Increase
10,500,000.00
10,500,000.00
(3,335,294.12)
7,164,705.88

Hyun Corp.
Fair Value Less Costs to Sell

24,800,000.00

Dec. 31, 2006 FV less Costs to Sell

Value in Use

Value in Use:
Net Cash Flows
11,200,000.00
9,600,000.00
7,200,000.00
3,200,000.00
31,200,000.00

PV Factor
0.90909
0.82645
0.75131
0.68301

Recoverable Amount
Carrying Amount
Impairment Loss

25,710,812.10
32,000,000.00
6,289,187.90

Depreciation - 2005

2,571,081.21

Equipment @ Cost
Accumulated Depreciation
Accumulated Impairment
Carrying Value - 12/31/2005
CV - 12/31/2005
Depreciation
CV - 12/31/2006

48,000,000.00
(18,571,081.21)
(6,289,187.90)
23,139,730.89
23,139,730.89
(2,571,081.21)
20,568,649.68

10,181,818.18
7,933,884.30
5,409,466.57
2,185,643.06
25,710,812.10

Equipment
Accumulated Depreciation
Depreciation 2005 & 2006
CV - 12/31/2006
CV with Impairment
Recoverable Amount
Reversal of Impairment Loss
Dec. 31, 2006 FV less Costs to Sell
Value in Use
CV without Impairment
CV with Impairment
Reversal of Impairment Loss

24,000,000.00
23,500,000.00
48,000,000.00
(16,000,000.00)
(6,400,000.00)
25,600,000.00
20,568,649.68
24,000,000.00
3,431,350.32
26,000,000.00
25,500,000.00
25,600,000.00
20,568,649.68
5,031,350.32