(b) Your answer is incorrect. Prepare the journal entry for the equipment at December 31, 2026. The fair value of the equipment at December 31, 2026, is estimated to be $7,198,000. (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 debit entry before credit entry.) Date Account Titles and Explanation Dec. 31 Debit Credit ent 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) Prepare the journal entry (if any) to record the impairment at December 31, 2025. (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 debit entry before credit entry.) Date Dec. 31 Account Titles and Explanation eTextbook and Media Debit Credit
(b) Your answer is incorrect. Prepare the journal entry for the equipment at December 31, 2026. The fair value of the equipment at December 31, 2026, is estimated to be $7,198,000. (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 debit entry before credit entry.) Date Account Titles and Explanation Dec. 31 Debit Credit ent 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) Prepare the journal entry (if any) to record the impairment at December 31, 2025. (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 debit entry before credit entry.) Date Dec. 31 Account Titles and Explanation eTextbook and Media Debit Credit
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
Related questions
Question
PLEASE HELP ME WITH THIS ACCOUNTING PROBLEM!
Transcribed Image Text:(b)
Your answer is incorrect.
Prepare the journal entry for the equipment at December 31, 2026. The fair value of the equipment at December 31, 2026, is
estimated to be $7,198,000. (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 debit entry before credit entry.)
Date
Account Titles and Explanation
Dec. 31
Debit
Credit
Transcribed Image Text:ent 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)
Prepare the journal entry (if any) to record the impairment at December 31, 2025. (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 debit entry before credit entry.)
Date
Dec. 31
Account Titles and Explanation
eTextbook and Media
Debit
Credit
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