6. The management of Sprague Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $900,000 with depreciation to date of $500,000 as of December 31, 2022. On December 31, 2022, management projected the present value of future net cash flows from this equipment to be $300,000 and its fair value less cost of disposal to be $250,000. The company intends to use this equipment in the future. The remaining useful life of the equipment is four years. Required: Prepare the journal entry (if any) to record the impairment at December 31, 2022.

6. The management of Sprague Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $900,000 with depreciation to date of $500,000 as of December 31, 2022. On December 31, 2022, management projected the present value of future net cash flows from this equipment to be $300,000 and its fair value less cost of disposal to be $250,000. The company intends to use this equipment in the future. The remaining useful life of the equipment is four years. Required: Prepare the journal entry (if any) to record the impairment at December 31, 2022.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ac.
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am.107.
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