The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2023: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) Expected future net cash flows (discounted, value in use) Fair value Costs to sell (costs of disposal) Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation. (a) Assume that Sweet Acacia is a private company that follows ASPE. 1. Your answer is correct. Prepare the journal entry at December 31, 2023, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2024. 3. The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase in fair value. 2. No. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date $9,900,000 1,100,000 7,700,000 6,985,000 6,820,000 55,000 (1) December 31, 2023 Loss on Impairment (2) December 31, 2024 (3) December 31, 2024 Account Titles and Explanation Accumulated Impairment Losses - Equipment Depreciation Expense Accumulated Depreciation - Equipment No Entry Debit 1980000 1705000 Credit 1980000 1705000
The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2023: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) Expected future net cash flows (discounted, value in use) Fair value Costs to sell (costs of disposal) Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation. (a) Assume that Sweet Acacia is a private company that follows ASPE. 1. Your answer is correct. Prepare the journal entry at December 31, 2023, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2024. 3. The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase in fair value. 2. No. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date $9,900,000 1,100,000 7,700,000 6,985,000 6,820,000 55,000 (1) December 31, 2023 Loss on Impairment (2) December 31, 2024 (3) December 31, 2024 Account Titles and Explanation Accumulated Impairment Losses - Equipment Depreciation Expense Accumulated Depreciation - Equipment No Entry Debit 1980000 1705000 Credit 1980000 1705000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer the following question
Must choose from the following LIST OF ACCOUNTS:
Accumulated Depletion
Accumulated Depreciation - Buildings
Accumulated Depreciation - Equipment
Accumulated Depreciation - Furniture and Fixtures
Accumulated Depreciation - Machinery
Accumulated Depreciation - Vehicles
Accumulated Impairment Losses - Building
Accumulated Impairment Losses - Equipment
Accumulated Impairment Losses - Land
Accumulated Impairment Losses - Machinery
Accumulated Impairment Losses - Mine
Accumulated Impairment Losses - Patents
Accumulated Impairment Losses - Tools and Dies
Accumulated Impairment Losses - Vehicles
Asset Retirement Obligation
Buildings
Cash
Common Shares
Contribution Expense
Cost of Goods Sold
Deferred Revenue - Government Grants
Depreciation Expense
Equipment
Furniture and Fixtures
Gain on Disposal of Automobiles
Gain on Disposal of Building
Gain on Disposal of Equipment
Gain on Disposal of Furniture and Fixtures
Gain on Disposal of Machinery
Gain on Disposal of Vehicles
Gain on Sale of Land
Interest Expense
Interest Pavable
Inventory
Investment Property
Land
Liability for Site Restoration
Loss on Disposal of Automobiles
Loss on Disposal of Building
Loss on Disposal of Equipment
Loss on Disposal of Machinery
Loss on Disposal of Vehicles
Loss on Expropriation
Loss on Impairment
Loss on Sale of Land
Machinery
Mineral Resources
No Entry
Notes Payable
Oil Property
Recovery of Loss from Impairment
Repairs and Maintenance Expense
Retained Earnings
Revaluation Surplus (OCI)
Revenue - Government Grants
Royalty Expense
Vehicles
Transcribed Image Text:The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2023:
Cost
Accumulated depreciation to date
Expected future net cash flows (undiscounted)
Expected future net cash flows (discounted, value in use)
Fair value
Costs to sell (costs of disposal)
(a)
1.
Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation.
2.
3.
Your answer is correct.
Assume that Sweet Acacia is a private company that follows ASPE.
No.
Date
(1) December 31, 2023
Prepare the journal entry at December 31, 2023, to record asset impairment, if any.
Prepare the journal entry to record depreciation expense for 2024.
The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase in fair value.
(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
(2) December 31, 2024
(3) December 31, 2024
$9,900,000
1,100,000
Loss on Impairment
7,700,000
6,985,000
6,820,000
Account Titles and Explanation
Depreciation Expense
55,000
No Entry
Accumulated Impairment Losses - Equipment
No Entry
Accumulated Depreciation - Equipment
Debit
1980000
1705000
ill
Credit
1980000
1705000
0
Transcribed Image Text:Repeat the requirements in part (a) above assuming that Sweet Acacia is a public company that follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles a
No.
Date
(1) December 31, 2023
(3)
December 31, 2024
December 31, 2024
Account Titles and Explanation
Loss on Impairment
Accumulated Impairment Losses - Equipment
Depreciation Expense
Accumulated Depreciation - Equipment
Debit
1815000
1746250
11
Credit
1815000
1746250
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