Crane Corporation uses straight-line depreciation, prepares adjusting entries annually, and has a December 31 year end. It purchased equipment on January 1, 2020, for $196,400. The equipment had an estimated useful life of five years and a residual value of $20,440. On December 31, 2021, the company tests for impairment and determines that the equipment's fair value is $95,600. (a) (b) Your answer has been saved. See score details after the due date. Assuming annual depreciation has already been recorded at December 31, calculate the equipment's carrying amount at December 31, 2021, immediately after recording depreciation for the year. Carrying amount $ Calculate the amount of the impairment loss, if any. Impairment loss $ 126016 Save for Later Attempts: 1 of 1 used Attempts: 0 of 1 used Submit Answer

Crane Corporation uses straight-line depreciation, prepares adjusting entries annually, and has a December 31 year end. It purchased equipment on January 1, 2020, for $196,400. The equipment had an estimated useful life of five years and a residual value of $20,440. On December 31, 2021, the company tests for impairment and determines that the equipment's fair value is $95,600. (a) (b) Your answer has been saved. See score details after the due date. Assuming annual depreciation has already been recorded at December 31, calculate the equipment's carrying amount at December 31, 2021, immediately after recording depreciation for the year. Carrying amount $ Calculate the amount of the impairment loss, if any. Impairment loss $ 126016 Save for Later Attempts: 1 of 1 used Attempts: 0 of 1 used Submit Answer

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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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

Crane Corporation uses straight-line depreciation, prepares adjusting entries annually, and has a December 31 year end. It purchased
equipment on January 1, 2020, for $196,400. The equipment had an estimated useful life of five years and a residual value of $20,440.
On December 31, 2021, the company tests for impairment and determines that the equipment's fair value is $95,600.
(a)
(b)
Your answer has been saved. See score details after the due date.
Assuming annual depreciation has already been recorded at December 31, calculate the equipment's carrying amount at
December 31, 2021, immediately after recording depreciation for the year.
Carrying amount
Calculate the amount of the impairment loss, if any.
Impairment loss $
126016
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Crane Corporation uses straight-line depreciation, prepares adjusting entries annually, and has a December 31 year end. It purchased equipment on January 1, 2020, for $196,400. The equipment had an estimated useful life of five years and a residual value of $20,440. On December 31, 2021, the company tests for impairment and determines that the equipment's fair value is $95,600. (a) Your answer has been saved. See score details after the due date. Assuming annual depreciation has already been recorded at December 31, calculate the equipment's carrying amount at December 31, 2021, immediately after recording depreciation for the year. (b) Carrying amount $ 126016 Calculate the amount of the impairment loss, if any. Impairment loss $ Attempts: 1 of 1 used W
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