Exercise 11-17 Presented below is information related to equipment owned by Suar
ID: 2475270 • Letter: E
Question
Exercise 11-17 Presented below is information related to equipment owned by Suarez Company at December 31, 2014. Cost $ 14,607,000 Accumulated depreciation to date 1,623,000 Expected future net cash flows 11,361,000 Fair value 7,790,400 Suarez intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $ 32,460 . As of December 31, 2014, the equipment has a remaining useful life of 4 years. Partially correct answer. Your answer is partially correct. Try again. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. (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 Entry field with correct answer Entry field with incorrect answer now contains modified data Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with incorrect answer Link to Text Incorrect answer. Your answer is incorrect. Try again. Prepare the journal entry (if any) to record depreciation expense for 2015. (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.) Account Titles and Explanation Debit Credit Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Link to Text Incorrect answer. Your answer is incorrect. Try again. The asset was not sold by December 31, 2015. The fair value of the equipment on that date is $8,601,900. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $32,460. (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 Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Entry field with incorrect answer Link to Text Question Attempts: Unlimited Save for later Submit Answer Copyright © 2000-2016 by John Wiley & Sons, Inc. or related companies. All rights reserved.
Explanation / Answer
Answer b.
Answer a. Expected Future Cash Flow 11,361,000 Book Value of Equipment (14,607,000 - 1,623,000) 12,984,000 Book Value is More than Future Net Cas Inflow - Fails in Recoverability Test - Asset shoul be impaired Calculation of Impairment Charge / Loss Cost 14,607,000 Accumulated Dep 1,623,000 Carrying Value 12,984,000 Fair Value 7,790,400 Impairment Loss 5,193,600Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.