Assume that Waterway is a private company that follows ASPE. 1. 2. 3. 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 $7.93 million. Prepare the journal entry, if any, to record the increase in fair value.
Assume that Waterway is a private company that follows ASPE. 1. 2. 3. 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 $7.93 million. Prepare the journal entry, if any, to record the increase in fair value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assume that Waterway is a private company that follows ASPE.
1.
2.
Your answer is partially correct.
3.
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 $7.93 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 for the amounts List all debit entries before credit entries
Transcribed Image Text:The information that follows relates to equipment owned by Waterway 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)
$10,980,000
1,220,000
8,540,000
7,747,000
7,564,000
61,000
Assume that Waterway will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful
life of four years. Waterway uses the straight-line method of depreciation.
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