ACG3101 Discussion Board

mikey896
Sep 14, 2022
1 min read

Feel free to ask any questions regarding the new FAR 1 material or in general about the class! Remember, its Automatic!

If you have questions about a specific textbook problem or question in a review packet, please be very clear (Exam 1 Review, page 18, question #, etc).

Good luck studying!

263 Comments

Gracie D

Apr 25

For Chapter 12 Practice Question #11 in the Exam 3 Review, why do we not remove the Drilling Platform and its Accumulated Depreciation at the end of 2021?

Mikey Brown

Apr 28

Replying to

That is a great question - the question is only asking about the Asset Retirement Obligation that we make at the end of the useful life. So while we should eventually eliminate the accumualted depreciation + drilling platform - the questions for this exam focus on the gain/loss on completion.

Also note, accumulated deprecaition would equal the drilling platform so the entry would be simply debit AD and credit drilling platform for the total amounts.

arayaa

Apr 25

Why are the entries for warranty expense / cash different on question 13 in the chapter review packet and question 8 under chapter 12 on the exam review packet? The chapter review video has it written down as debit warranty exp 450 and credit cash 450, the exam review one has it down as debit warranty exp 1500 and credit cash 1500.

Mikey Brown

Apr 28

Replying to

Question 8 on the Chapter 12 packet is an error we are updating now - the 1500 warranty expense/cash should be for 450. Just a typo there!

Gracie D

Apr 25

For Chapter 9 Practice Question #13 in the Exam 3 review, why do we include the costs of land and associated costs when calculating weighted average accumulated expenditures? I am confused because the interest on those costs are ultimately debited to the Building account, but wouldn't the costs incurred on January 1st, 2022 relating to land be directly capitalized the land account?

Mikey Brown

Apr 25

Replying to

Great question - this is one straight from the textbook actually.

So land can never capitalize interest because land is permanent - there is never a "construction phase". Since most questions don't mention the cost of land being a payment, you usually don't realize that it is a cash flow that would be included.

Just know that any expenditures for land should be included when calculating WAAX for a building since the land needs to be purchased first in order to ever build something on top of it - but the capitalized interest will only go to an Asset being constructed and during the period of construction.

Odd question from textbook !

Srija Dey

Apr 05

Where can we find the ARO supplement packet for Chapter 9?

Mikey Brown

Apr 07

Replying to

Hi,

The ARO Supplement is available in the printed Exam 3 Chapter Review Packets.

If you would like the PDF version of the Chapter Reviews, please email us at automatictutoring@gmail.com & we can send you the full PDF version, including the ARO Supplement & Chapters 10-12!

This comment was deleted.

Mikey Brown

Mar 31

Replying to

So impairments and write offs are different things. A write off can be reversed as we have learned but impairments of receivables (usually long-term) cannot be reversed.