At December 31, Year 5, Aaron Co. had the following property, plant, and equipment: Asset Fair Value Cost to Sell Present Value of All Cash Flows Expected from the Asset Sum of All Undiscounted Cash Flows Expected from the Asset Useful Life from the Acquisition Date (Depreciation Method) Residual Value Equipment $220,000 $5,000 $230,000 $255,000 6 years (Straight Line) $0 Machine set 310,000 8,000 320,000 335,000 4 years (SYD) 0 Land 660,000 9,000 600,000 640,000 Determine the impairment losses recognized for Year 5 under U.S. GAAP and IFRS. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive numbers. If the correct answer is zero, enter a zero (0). Purchase Receipt 3 - Land Purchase Date: 1/1/Year 3 Purchase Amount: $650,000 Purchase Receipt 2 - Machine Set Purchase Date: 1/1/Year 5 Purchase Amount: $600,000 Purchase Receipt 1 - Equipment Purchase Date: 7/1/Year 2 Purchase Amount: $600,000
At December 31, Year 5, Aaron Co. had the following property, plant, and equipment: Asset Fair Value Cost to Sell Present Value of All Cash Flows Expected from the Asset Sum of All Undiscounted Cash Flows Expected from the Asset Useful Life from the Acquisition Date (Depreciation Method) Residual Value Equipment $220,000 $5,000 $230,000 $255,000 6 years (Straight Line) $0 Machine set 310,000 8,000 320,000 335,000 4 years (SYD) 0 Land 660,000 9,000 600,000 640,000 Determine the impairment losses recognized for Year 5 under U.S. GAAP and IFRS. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive numbers. If the correct answer is zero, enter a zero (0). Purchase Receipt 3 - Land Purchase Date: 1/1/Year 3 Purchase Amount: $650,000 Purchase Receipt 2 - Machine Set Purchase Date: 1/1/Year 5 Purchase Amount: $600,000 Purchase Receipt 1 - Equipment Purchase Date: 7/1/Year 2 Purchase Amount: $600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At December 31, Year 5, Aaron Co. had the following property, plant, and equipment:
| Asset | Fair Value | Cost to Sell | Present Value of All Cash Flows Expected from the Asset | Sum of All Undiscounted Cash Flows Expected from the Asset | Useful Life from the Acquisition Date (Depreciation Method) | Residual Value |
| Equipment | $220,000 | $5,000 | $230,000 | $255,000 | 6 years (Straight Line) | $0 |
| Machine set | 310,000 | 8,000 | 320,000 | 335,000 | 4 years (SYD) | 0 |
| Land | 660,000 | 9,000 | 600,000 | 640,000 |
Determine the impairment losses recognized for Year 5 under U.S. GAAP and IFRS. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive numbers. If the correct answer is zero, enter a zero (0).
|
Purchase Receipt 3 - Land |
|
|
Purchase Date: 1/1/Year 3 |
Purchase Amount: $650,000 |
|
Purchase Receipt 2 - Machine Set |
|
|
Purchase Date: 1/1/Year 5 |
Purchase Amount: $600,000 |
|
Purchase Receipt 1 - Equipment |
|
|
Purchase Date: 7/1/Year 2 |
Purchase Amount: $600,000 |
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