Exercise 11-16 Presented below is information related to cquipment owned by Conc
ID: 2525689 • Letter: E
Question
Exercise 11-16 Presented below is information related to cquipment owned by Concord Company at December 31, 2017 Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,540,000 1,060,000 7,420,000 5,088,000 Assume that Concord will continue to use this asset in the future, As of December 31, 2017, the equipment has a remaining useful life of 5 years. in the future. As of seful life of s 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 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record depreciation expense for 2018. (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.)Explanation / Answer
firt let us test impairment of asset:
1 . journal entry to record impairment of asset:
2. depreciation expense for 2018.
depreciation = fair value / life in years => 5,088,000 / 5
=>1,017,600.
c. restoring of impairment loss is not allowed if asset is held for use by US GAAP.
No entry.
Cost 9,540,000 less: accumulated depreciation to date (1,060,000) carrying amount 8,480,000 fair value 5,088,000 loss on impairment (8,480,000 - 5,088,000) 3,392,000Related Questions
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