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Current Attempt in Progress Blue Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $12,200,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Blue's equipment. Blue's controller estimates that expected future net cash flows on the equipment will be $7,686,000 and that the fair value of the equipment is $6,832,000. Blue intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Blue uses straight-line depreciation. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment at December 31, 2025. (If no entry is required, select "No entry" for the (c) Prepare the journal entry (if any) to record the impairment at December 31, 2025 and at December 31, 2026, assuming that Blue intends to dispose of the equipment and that it has not been disposed of as of December 31, 2026. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation eTextbook and Media Debit Credit

Current Attempt in Progress Blue Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $12,200,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Blue's equipment. Blue's controller estimates that expected future net cash flows on the equipment will be $7,686,000 and that the fair value of the equipment is $6,832,000. Blue intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Blue uses straight-line depreciation. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment at December 31, 2025. (If no entry is required, select "No entry" for the (c) Prepare the journal entry (if any) to record the impairment at December 31, 2025 and at December 31, 2026, assuming that Blue intends to dispose of the equipment and that it has not been disposed of as of December 31, 2026. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation eTextbook and Media Debit Credit

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 6CE
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Current Attempt in Progress Blue Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $12,200,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Blue's equipment. Blue's controller estimates that expected future net cash flows on the equipment will be $7,686,000 and that the fair value of the equipment is $6,832,000. Blue intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Blue uses straight-line depreciation. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment at December 31, 2025. (If no entry is required, select "No entry" for the
Transcribed Image Text:Current Attempt in Progress Blue Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $12,200,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Blue's equipment. Blue's controller estimates that expected future net cash flows on the equipment will be $7,686,000 and that the fair value of the equipment is $6,832,000. Blue intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Blue uses straight-line depreciation. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment at December 31, 2025. (If no entry is required, select "No entry" for the
(c) Prepare the journal entry (if any) to record the impairment at December 31, 2025 and at December 31, 2026, assuming that Blue intends to dispose of the equipment and that it has not been disposed of as of December 31, 2026. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation eTextbook and Media Debit Credit
Transcribed Image Text:(c) Prepare the journal entry (if any) to record the impairment at December 31, 2025 and at December 31, 2026, assuming that Blue intends to dispose of the equipment and that it has not been disposed of as of December 31, 2026. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation eTextbook and Media Debit Credit
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