Splish Company owns equipment that cost $1,116,000 and has accumulated depreciation of $471,200. The expected future...
Splish Company owns equipment that cost $1,116,000 and has
accumulated depreciation of $471,200. The expected future net cash
flows from the use of the asset are expected to be $620,000. The
fair value of the equipment is $496,000.
Prepare the journal entry, if any, to record the impairment loss.
(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.)
Homework Answers
Book value of equipment = Cost price - Accumulated depreciation
= 1,116,000-471,200
= $644,800
Impairment loss = Book value of equipment - Fair value
= 644,800-496,000
= $148,800
| General Journal | Debit | Credit |
| Impairment loss | $148,800 | |
| Equipment | $148,800 |
Kindly comment if you need further assistance.
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