(3)The information that follows relates to equipment owned by Buffalo Limited at December 31, 2020:(3)Cost(2)(2)Accumulated depreciation to dateExpected future net cash flows (undiscounted)Expected future net cash flows (discounted, value in use)Fair value3Costs to sell (costs of disposal)Assume that Buffalo will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life offour years. Buffalo uses the straight-line method of depreciation.Assume that Buffalo will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life offour years. Buffalo uses the straight-line method of depreciation.Assume that Buffalo is a private company that follows ASPE1.2.(1)(1)Assume that Buffalo is a private company that follows ASPE- Your answer is partially correct.No. Date Account Titles and ExplanationDecember31, 2020(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "NoEntry for the account titles and enter O for the amounts)No.Prepare the journal entry at December 31, 2020, to record asset impairment, if any.Prepare the journal entry to record depreciation expense for 2021.The equipment's fair value at December 31, 2021 is $5,33 million. Prepare the journal entry, if any, to record the increasein fair value.December31, 2021December31, 2021DateDecember31, 2020December31, 2021Loss on ImpairmentDecember31, 2021Accumulated Impairment Losses-EquipmentDepreciation ExpenseAccumulated Depreciation EquipmentLoss on ImpairmentAccount Titles and Explanation$7,380,000820,0005,740,0005,207,0005,084,000Loss on Impairment41.000Repeat the requirements in (a) above assuming that Buffalo is a public company that follows IFRS. (Credit account titles areautomatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts)Accumulated Impairment Losses-EquipmentDepreciation ExpenseAccumulated Depreciation EquipmentLoss on ImpairmentDebit135300016400001353000Debit13530001640000Credit335300013531640Credit13501640

As per the above question we need to pass Journal Entries as per US GAAP and IFRS.

Assume that Buffalo is a private company that follows ASPE 1 2. 3 Prepare the journal entry at December 31, 2020, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2021. The equipment's fair value at December 31, 2021 is $5.33 million. Prepare the journal entry, if any, to record the increase in fair value

Assume that Buffalo is a private company that follows ASPE 1 2. 3 Prepare the journal entry at December 31, 2020, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2021. The equipment's fair value at December 31, 2021 is $5.33 million. Prepare the journal entry, if any, to record the increase in fair value

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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Subject: accounting