Identifying and Recording Impairment Loss on Fixed Asset Supreme Inc. has equipment with an original cost of $650,000, and accumulated depreciation of $300,000. Supreme is aware of a general market decline in the value of this equipment due to upgrades that are now available. Supreme estimates the total remaining future net cash inflows from operating the equipment to be $400,000. The fair value of the equipment is estimated to be $300,000 based on conditions in the market. Prepare the entry, if any, that Supreme should make to record the decline in value. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Account Name Loss on Impairment Cost of Oil Reserve O O X x Dr. 50.000 x 04 Cr. OM 50,000 x
Identifying and Recording Impairment Loss on Fixed Asset Supreme Inc. has equipment with an original cost of $650,000, and accumulated depreciation of $300,000. Supreme is aware of a general market decline in the value of this equipment due to upgrades that are now available. Supreme estimates the total remaining future net cash inflows from operating the equipment to be $400,000. The fair value of the equipment is estimated to be $300,000 based on conditions in the market. Prepare the entry, if any, that Supreme should make to record the decline in value. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Account Name Loss on Impairment Cost of Oil Reserve O O X x Dr. 50.000 x 04 Cr. OM 50,000 x
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Identifying and Recording Impairment Loss on Fixed Asset
Supreme Inc. has equipment with an original cost of $650,000, and accumulated depreciation of
$300,000. Supreme is aware of a general market decline in the value of this equipment due to
upgrades that are now available. Supreme estimates the total remaining future net cash inflows
from operating the equipment to be $400,000. The fair value of the equipment is estimated to be
$300,000 based on conditions in the market. Prepare the entry, if any, that Supreme should make
to record the decline in value.
Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account
names and leave the Dr. and Cr. answers blank (zero).
Account Name
Loss on Impairment
Cost of Oil Reserve
Ĉ X
43
Dr.
50.000 x
04
Cr.
OM
50,000 x
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