Property, Plant and EquipmentWe review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in MillionsCost of property and equipment (beginning of year)$ 54,644Cost of property and equipment (end of year)59,766Capital expenditures during the year6,510Accumulated depreciation (beginning of year)28,016Accumulated depreciation (end of year)29,310Depreciation expense during the year2,490Cost of property and equipment sold during the year1,388Accumulated depreciation on property sold1,196Cash received on property sold130Required:Compute the amount of property and equipment that United Presents wrote off as impaired during the year, if any. (Hint: Set up T-accounts.)

Answered: Compute the amount of property and…

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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Property, Plant and Equipment

We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate.

	Dollars in Millions
Cost of property and equipment (beginning of year)	$ 54,644
Cost of property and equipment (end of year)	59,766
Capital expenditures during the year	6,510
Accumulated depreciation (beginning of year)	28,016
Accumulated depreciation (end of year)	29,310
Depreciation expense during the year	2,490
Cost of property and equipment sold during the year	1,388
Accumulated depreciation on property sold	1,196
Cash received on property sold	130

Required:

Compute the amount of property and equipment that United Presents wrote off as impaired during the year, if any. (Hint: Set up T-accounts.)

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