Presented below is information related to equipment owned by Blue Company at December 31, 2020.
Cost | $10,980,000 | |
Accumulated depreciation to date | 1,220,000 | |
Expected future net cash flows | 8,540,000 | |
Fair value | 5,856,000 |
Blue intends to dispose of the equipment in the coming year. It is
expected that the cost of disposal will be $24,400. As of December
31, 2020, the equipment has a remaining useful life of 5 years.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
Dec. 31 |
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
Prepare the journal entry (if any) to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation |
Debit |
Credit |
---|---|---|
enter an account title |
enter a debit amount |
enter a credit amount |
The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $6,466,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $24,400. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
Dec. 31 |
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
a | |||
Account Titles and Explanation | Debit | Credit | |
Loss on impairment | 3928400 | ||
Accumulated depreciation-Equipment | 3928400 | ||
b | |||
Account Titles and Explanation | Debit | Credit | |
No entry | 0 | ||
No entry | 0 | ||
c | |||
Account Titles and Explanation | Debit | Credit | |
Accumulated depreciation-Equipment | 610000 | ||
Recovery of loss on Impairment | 610000 | ||
Workings: | |||
Cost | 10980000 | ||
Less: Accumulated depreciation | 1220000 | ||
Carrying Amount | 9760000 | ||
Less:Fair value, net of disposal costs | 5831600 | =5856000-24400 | |
Loss on impairment | 3928400 | ||
No depreciation is recorded on assets intended to be disposed off | |||
Fair value, net of disposal costs, Revised | 6441600 | =6466000-24400 | |
Less: Fair value, net of disposal costs | 5831600 | =5856000-24400 | |
Recovery of loss on Impairment | 610000 |
Presented below is information related to equipment owned by Blue Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by Blue Company at December 31, 2020, Cost Accumulated depreciation to date Expected future net cash flows Fair value $10.980,000 1,220,000 8,540,000 5,856,000 Blue intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,400. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Metlock Company at December 31, 2020. Cost $9,900,000 Accumulated depreciation to date 1,100,000 Expected future net cash flows 7,700,000 Fair value 5,280,000 Metlock intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,000. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Coronado Company at December 31, 2020. Cost $10,080,000 Accumulated depreciation to date 1,120,000 Expected future net cash flows 7,840,000 Fair value 5,376,000 Assume that Coronado will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Presented below is information related to equipment owned by Metlock Company at December 31, 2020. Cost $9,900,000 Accumulated depreciation to date 1,100,000 Expected future net cash flows 7,700,000 Fair value 5,280,000 Assume that Metlock will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Presented below is information related to equipment owned by Sheffield Company at December 31, 2020. Cost $10,530,000 Accumulated depreciation to date 1,170,000 Expected future net cash flows 8,190,000 Fair value 5,616,000 Assume that Sheffield will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Partially correct answer iconYour answer is partially correct. Prepare the journal entry (if any) to record the impairment of the asset at...
Presented below is information related to equipment owned by Kingbird Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,890,000 1,210,000 8,470,000 5,808,000 Kingbird intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,200. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Nash Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,180,000 1,020,000 7,140,000 4,896,000 Nash intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $20,400. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Bonita Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,810,000 1,090,000 7,630,000 5,232,000 Bonita intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,800. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Blossom Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $11,070,000 1,230,000 8,610,000 5,904,000 Blossom intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,600. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Windsor Company at December 31, 2020. Cost $9,720,000 Accumulated depreciation to date 1.080,000 Expected future net cash flows 7,560,000 Fair value 5,184,000 Windsor intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,600. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the...