Question

Exercise 11-17 (Part Level Submission) Presented below is information related to equipment owned by Pearl Company at December 31, 2017, Cost Accumulated depreciation to date 1,070,000 Expected future net cash flows Fair value $9,630,000 7,490,000 5,136,000 Pearl intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,400. As of December 31, 2017, the equipment has a remaining useful life of 4 years. ▼ (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (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 Click if you would like to Show Work for this question: Open Show Work

Answer 1

	Debit	Credit
Loss on impairment	3445400
Accumulated depreciation-Equipment		3445400
Workings:
Cost	9630000
Less: Accumulated depreciation	1070000
Carrying Amount	8560000
Less:Fair value, net of disposal costs	5114600		=5136000-21400
Loss on impairment	3445400