Jurassic Company owns machinery that cost $900,000 and has accumulated depreciation of $380,000. The present value of expected future net cash flows from the use of the asset are expected to be $500,000. The fair value less cost of disposal of the equipment is $400,000. Prepare the journal entry, if any, to record the impairment loss.
Q: During the current year, Rodgers Company purchased two assets that are described as follows: Heavy…
A: The amount of a tangible asset decreased will be treated as depreciation and that of intangible is…
Q: On December 31, 2020, ABC Company has an item of machinery with a cost of P 4,500,000 and an…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: ARON Corp. acquired a machine at a total cost of P5,200,000. The estimated life of the machine is 8…
A: Depreciation per hour = (Cost of the assets - Salvage value) / Total estimated operating machine…
Q: Jurassic Company owns equipment that cost $900,000 and has accumulated depreciation of $380,000. The…
A: Calculate the amount of impairment loss:
Q: EL Corporation, an entity under the mining industry, incurred a total of ₱20,000,000 on March 31,…
A: Depletion expense is the expense charged on the use of the natural resources during the accounting…
Q: Martinez Company owns equipment that cost $1,053,000 and has accumulated depreciation of $444,600.…
A: Computation of impairment loss:
Q: The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000, depreciating it over 8…
A: The question is related to Consolidated Financial Statements and is multiple choice question.…
Q: the equipment had a fair value of $4,500,000. The equipment originally cost Brody $4,680,000, had…
A: Loss on impairment = carrying value - Recoverable amount Where, Recoverable amount = Lower of fair…
Q: EL Corporation, an entity under the mining industry, incurred a total of ₱20,000,000 on March 31,…
A: The systemic redistribution of costs related to extracting or obtaining natural resources from a…
Q: On January 1, 2021, Brandy Company owned a group of machines with the following aggregate cost and…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: On January 1, 2024, Birdman Company purchased for P240,000 a machine with a useful life of 10 years…
A: A change in depreciation method is a change in method that is not distinguishable from a change in…
Q: enda Corporation purchased a building for $800,000. The current carrying amount of the building is…
A: Solution: Recoverable amount = higher of fair value or value in use = higher of 360000 or 320000 =…
Q: On January 1, 2011, RIGHTEOUS MORAL Co. acquired a piece of equipment for ₱2,000,000. The equipment…
A: Discount rate = 10% Revised useful life = 4 years Annual cash flows from revenues = P200,000 Present…
Q: Flanagan Concrete owns equipment with a book value of $3,500,000. The equipment is estimated to…
A: Impairment loss = Carrying value of the assets - Recoverable value of the assets where, The…
Q: Mandu Corp. acquired a machine at a total cost of P5,200,000. The estimated life of the machine is 8…
A: Depreciation rate per hour = (Cost-Salvage value)/Total working hours
Q: Mortal Company acquired a machine for P3,200,000 on August 31, 2017. The machine has a 5-year useful…
A: Impairment of fixed assets means when fair value of the fixed assets is less than the carrying value…
Q: ABC Ltd, purchased a machinery worth of $ 100,000 in the year 2018.The machinery has no resale value…
A: Activity-based method of depreciation is a type of cost allocation process where it allocates the…
Q: ccount Titles and Explanation Debit Credit enter an account title enter a debit amount enter a…
A: Impairment means to bring the book value of your assets to the fair market value of the asset. The…
Q: A building owned and previously occupied by the company was vacated and was being negotiated for…
A: The details of building are given Required At what amount should this asset be measured on the…
Q: On December 31, 2020, ABC Company has an item of machinery with a cost of P 4,500,000 and an…
A: Recoverable Amount is higher of the following : 1. Fair value less cost of disposal = P 25,00,000…
Q: In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The…
A: The financial transactions are initially recorded in the journal form.
Q: On January 1, 2016, Makakaya Co. acquired machinery with a cost of P2,200,000 with an estimated…
A: Hi student, Since there are multiple subparts, we will answer only first three subparts.
Q: Marigold Corp. applies revaluation accounting to plant assets with a carrying value of $1650000, a…
A: The depreciation expense refers to the reduction in the value of fixed assets due to the use of that…
Q: Samson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a…
A: Financial statements: Financial statements are condensed summary of transactions communicated in the…
Q: After recording depreciation for the current year, Media Mania Incorporated decided to discontinue…
A: Loss on impairment = carrying value - Recoverable amount Where, Recoverable amount = Lower of fair…
Q: On December 31, 2022, Joshua Company had an equipment with cost of P9,000,000 and accumulated…
A: Lets understand the basics. As per IAS 36 "Impairment loss", impairment loss arise when recoverable…
Q: A building owned and previously occupied by the company was vacated and was being negotiated for…
A: As per the provision contain in PFRS 5, it applies to the following non current asset. Property…
Q: On December 31, 2021, Alexis Company has an item of machinery with a cost of P4,500,000 and an…
A: Impairment loss = Carrying value - Recoverable value Recoverable value = Lower of Value in use and…
Q: MAKINA Company acquired a machine for P6,400,000 on August 31, 2002. The machine has a 5-year life,…
A: The depreciation after recognizing the impairment loss on an asset is charged on the carrying amount…
Q: Joy Corporation decided to dispose of an item of plant that is carried in its records at a cost of…
A: The question is related to the Impairment of Assets. The details are given.
Q: Eagle Company purchased a piece of machinery for $75,000 on January 1, 20x1, and has been…
A: The FASB develops and issues financial accounting standards through a transparent and inclusive…
Q: Simpson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a…
A: Revaluation Reserve: When a firm adds a line item on its balance sheet for the purpose of keeping a…
Q: A company acquired machinery with cost of P2,200,000. with an estimated useful life of 10 years and…
A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for…
Q: On 1/1/X2, Hudson Enterprises decided to sell equipment it had been using in its business for…
A: The depreciation is charged on asset so at to reduce the book value of fixed asset with passage of…
Q: MKG, Inc. paid $400,000 for a piece of equipment that is expected to have a 12 year useful life. In…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: Lou Lou and Company purchased a piece of machinery 2 years ago for $50,000 and has depreciation to…
A: An asset is impaired if recoverable amount is less than its carrying amount. Recoverable amount is…
Q: EL Corporation, an entity under the mining industry, incurred a total of ₱20,000,000 on March 31,…
A: Depreciation is the amortization of the asset's cost over its useful life which will be debited to…
Q: The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000, depreciating it over 8…
A: Depreciation- It the amount of reduction in the cost of fixed tangible assets which can be due to…
Q: Shamrock Inc. owns equipment that cost $605,000 and has accumulated depreciation of $157,000. The…
A: Every fixed asset loses out its value over a period of time. This reduction in value will be…
Q: Barbosa Ltd purchased an item of plant for GHS 300,000 which was to be depreciated over its useful…
A: SOLUTION- GIVEN, ASSUME ON 1 JAN 20X1 ,BARBOSA LTD PURCHASED AN ITEM OF PLANT FOR GHS 300000 WHICH…
Q: On January 1, 2015, Jersey Corporation purchased for $800,000, equipment having a useful life of ten…
A: Assets are the resources of the business which it has acquired for business purpose. Assets can be…
Q: Corning Industries owns a patent for which it paid $77,000. At the end of the current year,…
A: Introduction: Corning Industries hold a patent that costs $77,000 to acquire. At the end of the…
Q: DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January…
A: Cost of machine = Purchase price + Freight in + Installation cost + Testing cost = P650,000 + 5,000…
Q: A company acquired machinery with cost of P2,200,000. with an estimated useful life of 10 years and…
A: Here in this question, we are required to calculate depreciation and revaluation surplus.…
Q: In 2018, Lepanto Mining Company purchased property with natural resources for P28,000,000. The…
A: Journal entry: A journal entry is used to record day-to-day transactions of the business by debiting…
Q: On January 1, 2020, A Company decided to sell one of its machineries with a cost of P3,400,000 and…
A: When the assets are categorised as held for sale, the net realisable value is considered for…
Q: Dina Corporation owns machinery with a book value of $635,000. It is estimated that the machinery…
A: Impairment loss is a situation when carrying value of the asset is more than the recoverable value.…
Q: REPTILE COMPANY acquired a machine on January 1, 2018 for P5,250,000. It was to be depreciated using…
A:
Jurassic Company owns machinery that cost $900,000 and has
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.Martinez Company owns equipment that cost $1,053,000 and has accumulated depreciation of $444,600. The expected future net cash flows from the use of the asset are expected to be $585,000. The fair value of the equipment is $468,000.Prepare the journal entry, if any, to record the impairment loss. (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 CreditSplish Brothers Inc. owns equipment that cost $627,000 and has accumulated depreciation of $162,000. The expected future net cash flows from the use of the asset are expected to be $414,000. The fair value of the equipment is $358,000.Prepare the journal entry, if any, to record the impairment loss. (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 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
- Windsor Company owns equipment that cost $972,000 and has accumulated depreciation of $410,400. The expected future net cash flows from the use of the asset are expected to be $540,000. The fair value of the equipment is $432,000.Prepare the journal entry, if any, to record the impairment loss. (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 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amountShamrock Inc. owns equipment that cost $605,000 and has accumulated depreciation of $157,000. The expected future net cash flows from the use of the asset are expected to be $400,000. The fair value of the equipment is $346,000. Prepare the journal entry, if any, to record the impairment loss. (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.) Account Titles and Explanation Debit CreditSage Hill Inc. owns equipment that cost $594,000 and has accumulated depreciation of $154,000. The expected future net cash flows from the use of the asset are expected to be $392,000. The fair value of the equipment is $339,000. Prepare the journal entry, if any, to record the impairment loss. (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.) Account Titles and Explanation Debit Credit
- * Your answer is incorrect. Bramble Company owns equipment that cost $1,026,000 and has accumulated depreciation of $433,200. The expected future net cash flows from the use of the asset are expected to be $620,000. The fair value of the equipment is $456,000. Prepare the journal entry, if any, to record the impairment loss. (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. List debit entry before credit entry.) Account Titles and Explanation Accumulated Depreciation - Equipment Loss on Impairment eTextbook and Media List of Accounts Debit 592800 0 Credit 0 592800Swifty Company owns equipment that cost $927,000 and has accumulated depreciation of $391,400. The expected future net cash flows from the use of the asset are expected to be $565,000. The fair value of the equipment is $412,000. Prepare the journal entry, if any, to record the impairment loss. (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. List debit entry before credit entry.) Account Titles and Explanation Loss on Impairment Accumulated Depreciation - Equipment Debit 123600 Credit 123600Novak Corp., a small company that follows ASPE, owns machinery that cost $925,000 and has accumulated depreciation of $385,000. The undiscounted future net cash flows from the use of the asset are expected to be $513,000. The equipment's fair value is $440,000. Using the cost recovery impairment model, prepare the journal entry, if any, to record the impairment loss. (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 debit entry before credit entry.) Account Titles and Explanation Debit Credit
- After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $748,000, accumulated depreciation was $547,000, and its fair value (based on estimated future cash flows from selling the equipment) was $48,000. Determine whether the equipment is impaired. Prepare the journal entries to record the impairment in asset if any. Fill in the blank : The fair value is ________ and the book value is ___________ , therefore this asset (is/is not) impaired Record journal entry to remove accumulated depreciation Record journal entry for the impairment lossFlanagan Concrete owns equipment with a book value of $3,500,000. The equipment is estimated to generate future cash flows of $2,975,000. The equipment has a fair value of $2,890,000. The journal entry to record the impairment loss will a.) increase the asset’s Accumulated Depreciation account by $610,000. b.) include a $610,000 credit to the Equipment account. c.) record a loss of $85,000. d.) reduce income from continuing operations by $525,000.Coachwhip Corporation purchased a machinery on January 1, 2022 for P5,000,000. The same had an expected useful life of 8 years. Straight line depreciation method is in place for similar items. On January 1, 2024, the asset is appraised as having a sound value of P4,500,000. On January 1, 2027, the asset had a recoverable value of P1.375.000. How much is the loss on impairment should be recognized on January 1, 2027?
