Michael Company acquired a depreciable asset at the beginning of 2020 at a cost of $30 million. On December 31, 2020, Madison gathered the following information related to this asset Fair value of the asset (Net Selling Price) $26.5 million Sum of future cash flows from the use of the asset $25 million Present value of future cash flows $26 million The remaining useful life of the asset 9 years Required: Under IFRS: 1) The determination and measurement of impairment loss? 2) Following journal entry would be made to reflect the impairment of this equipment on December 31, 2020?

Q: The following data relate to the acquisition of an equipment owned by BUSS Corporation. Acquisition…

A: Depreciation under Straight line  method cost - residual value / usefeel life of Asset $125000 -…

Q: Sunland Company purchased a machine on July 1, 2020, for $970000. The machine has an estimated…

A: The rate of depreciation under 150% declining balance method is calculated by dividing 150 by the…

Q: On December 31, 2022, Plattsville Plastics decided to dispose of an extrusion machine. The original…

A: The objective of the question is to determine the correct adjusting entry related to the disposal of…

Q: depreciation, what will be the debit to Depreciation Expense for the year ended December 31, 2020,…

A: Under the Straight Line Method (SLM), a fixed portion of the asset is depreciated every year till…

Q: Dawn Company purchased a machine on January 1, 2018 for P3,000,000. At the date of acquisition, the…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2019. The…

A: Double Declining Method of Depreciation: 2* Straight Line depreciation rate* Book Value Straight…

Q: Presented below is information related to equipment owned by Suarez Company at December 31, 2020.…

A:

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $77,400. The…

A: Given information:

Q: Presented below is information related to equipment owned by Davis Company at December 31, 2020.…

A: Impairment of Assets:Impairment of an asset refers to sudden decrease of the present value of…

Q: Steele Company purchased on January 1, 2020, a new machine for $2,100,000. The new machine has an…

A: Sum-of-the-years'-digits = 1+2+3+4+5+6+7+8+9 = 45 years

Q: On December 31, 2022, Belt Enterprises must measure its impairment loss for plant and equipment.…

A: Impairment loss occurs when the carrying value of an asset is higher than the recoverable value of…

Q: a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020.…

A: a     Account Titles and Explanation Debit Credit Loss on impairment 3,648,000…

Q: On January 1, 2018, an entity purchased a machine for P7,200,000 and depreciated it by the straight…

A: Since there are multiple questions, we will solve first for you. To get the remaining questions…

Q: Assume that Carleton reported the following information regarding a machine at December 31, 2019:…

A: Impairment refers to the situation when an asset of the company falls short in its fair market value…

Q: Equipment was purchased at the beginning of 2019 for $740000. At the time of its purchase, the…

A: Solution: Cost of equipment = $740,000 Initial estimated salvage value = $89,000 Useful life = 6…

Q: At the beginning of 2019, Robotics Inc. acquired a manufacturing facility for $13.4 million. $10.4…

A: Straight line method of depreciation : Under this method, depreciation is charged equally over the…

Q: udds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated…

A: The depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: impairment of the operational value. P100,000 over an eight-year life. through December 31, 2024 is…

A: Every fixed asset loses out it's value over the period of time. Depreciation is charged in order to…

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $70,100. The…

A: Introduction: A journal entry is being used to record a corporate transaction in the accounting…

Q: On January 2, 2020, KENNYInc. made a test of impairment on one of the buildings carried as plant…

A: After transfer ,rule of new IAS applies.

Q: On December 31, 2022, Plattsville Plastics decided to dispose of an extrusion machine. The original…

A: The objective of the question is to determine the correct adjusting entry related to the disposal of…

Q: Presented below is information related to equipment owned by Metlock Company at December 31, 2020.…

A:

Q: An equipment costing P375,000 with an eight-year estimated useful life and an estimated residual…

A: Life of equipment = 8 Years Sum of years digits = 8+7+6+5+4+3+2+1 = 36 Cost = P375,000 Salvage value…

Q: On October 1, 2021, Hess Company places a new asset into service. The cost of the asset is $120,000…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: On January 1, 2022, Sheridan Corporation acquired equipment at a cost of $777000. Sheridan adopted…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: Presented below is information related to equipment owned by Swifty Company at December 31, 2020.…

A: Impairment cost is reduced carrying value of an asset as compared to declined fair value.

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $75,900. The…

A: Cost of equipment  $72,000   Expected useful life 6   residual value $15,000   fair value…

Q: SYD method, how much is the depreciation expense

A: Estimated useful life = 5 years Sum of years' digits = 5 + 4 + 3 + 2 + 1 = 15

Q: Judds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated…

A: Solution a. Sum of the years digits method:  This is method is in line with diminishing balance…

Q: Presented below is information related to equipment owned by Pujols Company at December 31, 2020.…

A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…

Q: resented below is information related to equipment owned by Suarez Company at December 31, 2019.…

A: Impairment loss is excess of carrying amount of equipment over the fair value of equipment and it is…

Q: Presented below is information related to equipment owned by Sheridan Company at December 31, 2020.…

A: Working Note; Carrying value = Cost - Accumulated Depreciation                         = $9,630,000…

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $79,000. The…

A: As per the Honor code of Bartleby we are bound to give the answer of first three sub part only,…

Q: Amber Company applies revaluation accounting to plant assets with a carrying value of $800,000, a…

A: A journal entry is a written record in a company's accounting system that describes a business…

Q: On January 1, 2019, Pharoah Corporation acquired equipment at a cost of $768000. Pharoah adopted the…

A: First we need to calculate carrying amount of equipment at the beginning of 2021 after deduction of…

Q: Tinker Bell Company sold a delivery wing truck on March 1, 2022. Tinker had acquired the wing truck…

A: Depreciation is an accounting method used to allocate the cost of tangible assets over their useful…

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $75,100. The…

A: A journal entry is being used to record a corporate transaction in the accounting records of a…

Q: 19, Ivanhoe Corporation acquired equipment at a cost of $858000. Ivanhoe adopted the…

A: Solution: Sum of years digits = 8+7+6+5+4+3+2+1 = 36 Accumulated Depreciation for 2019, 2020, 2021 =…

Q: On January 1, 2019, Ciara Corporation acquired an equipment to be used in its manufacturing…

A: Given information, Useful life =10 years Residual value =P50,000 Depreciation for the year 2021…

Q: Parnell Company acquired construction equipment on January 1, 2020, at a cost of $78,400. The…

A: Depreciation is an accounting practice employed to estimate the expense of a long-term asset, such…

Q: Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each…

A: Depreciation per Year = (Historical cost - Residual Value)/Useful life  It is pertinent to note that…

Q: What amount should be reported as impairment loss on December 31, 2019? What is the carrying amount…

A: Given information is: On December 31, 2019, an entity has a machinery with the following cost and…

Q: Presented below is information related to copyrights owned by Taylor Corporation atDecember 31,…

A: Determine the amount of loss on impairment of the asset.

Q: Amicable Company purchased a machine at a cost of P635,000 on January 1, 2019.  It was estimated…

A: Depreciation is the reduction in the value of assets due to normal wear and tear, passage of time,…

Q: An asset was acquired on September 30, 2021, for $116,000 with an estimated five-year life and…

A: Gain (Loss) on Sale of Asset = Selling Price - Book Value

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.