Question

Sheffield Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $11,700,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Sheffield’s equipment. Sheffield’s controller estimates that expected future net cash flows on the equipment will be $7,371,000 and that the fair value of the equipment is $6,552,000. Sheffield intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Sheffield uses straight-line depreciation. Sheffield uses straight-line depreciation. Your answer is partially correct. Try again. Prepare the journal entry (if any) to record the impairment at December 31, 2017. (If no entry is required, select "No entry" for the account tities 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 Loss on Impairment Your answer is partially correct. Try again. Prepare the journal entry for the equipment at December 31, 2018. The fair value of the equipment at December 31, 2018, is estimated to be $6,077,000. (If no entry is required, select "No entry" for the account titles and enter o 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 n Expense Your answer is partially correct. Try again. Prepare the journal entry (if any) to record the impairment at December 31, 2017 and for the equipment at December 31, 2018, assuming that Sheffield intends to dispose of the equipment and that it has not been disposed of as of December 31, 2018. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account tities are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/1 12/31/1 Recovery of Loss from 1

Answer 1