Presented below is information related to equipment owned by Flounder Company at

Question

Presented below is information related to equipment owned by Flounder Company at December 31, 2017. Cost $9,090,000 Accumulated deprecation to date 1,010,000 Expected future net cash flows 7,070,000 Fair value 4,848,000 Flounder intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $20,200. 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 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 Dec. 31 Slow LIST OF ACCOUNTS LINK TO TEXT VIDEO SIMILAR EXERCIS Prepare the journal entry (if any) to record depreciation expense far 2018. (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 ually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: SIMILAR EXERCISE The asset wes not sold by December 31, 2010. The fair value of the equipment on tihet date is $5,353,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposel is still s20,200. (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

Explanation / Answer

a Loss on impairment 3252200 =(9090000-1010000)-4848000+20200          Accumulated depreciation-Equipment 3252200 b No entry c Accumulated depreciation-Equipment 505000 =5353000-4848000         Recovery of loss on Impairment 505000

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