Question

Exercise 11-16 Presented below is information related to equipment owned by Grouper Company at December 31. 2017. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,810,000 1,090,000 7,630,000 5,232,000 Assume that Grouper will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years. 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 DebitCredit Dec. 31

This question has 3 parts to it. thank you.

Answer 1

cost of machine		9810000
less accumulated depreciation		1090000
book value		8720000
Fair value		5232000
Loss on impairment	8720000-5232000	3488000
Book value after impairment		5232000
1-
date	explanation	debit	credit
31-Dec	loss on impairment	3488000
	accumulated depreciation		3488000
2-
Depreciation expense	5232000/4	1308000
31-Dec	depreciation expense	1308000
	accumulated depreciation		1308000
3-	No journal entry is required