Question

Exercise 11-16 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 Assume that Windsor will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Your answer is partially correct. Try again. 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 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 X Dec. 31 Loss on Impairment 3477600) x Accumulated Depreciati 3477600 Your answer is partially correct. Try again. Prepare the journal entry to record depreciation expense for 2021. (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.) Account Tities and Explanation Debit Credit TNo Entry 0 V 박 No Entry ol Your answer is partially correct. Try again. The fair value of the equipment at December 31, 2021, is $5,508,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (If no entry is required, select "No entry" for the account titles and entero 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 Accumulated Depreciation- 540000 Recovery of Loss from I 540000 Click if you would like to Show Work for this question: Open Show Work

Answer 1

		Debit $	Credit$
a)	Loss on impairment	$          34,56,000
	Accoumulated depreciation - Eqipment		$           34,56,000
	Note:
	Cost	$          97,20,000
	Less: Accoumulated Depreciation	$        -10,80,000
	Carring amount	$          86,40,000
	Less: Fair value	$        -51,84,000
	Loss on impaiment	$          34,56,000
		Debit $	Credit$
b)	Depreciation expenses	$          10,36,800
	Accoumulated depreciation - Eqipment		$           10,36,800
	Note:
	Depreciation = Fair value/ remaining useful life	5184000/5
	Depreciation =	$          10,36,800
c)	No enty
	No entry
	Restoration of impairment loss is not required for journal entry, hence it is not permitted