On January 1, 2018, Parneet Fitness Centre paid $690,000 for exercise equipment that had an estimated useful life of 32 years and an expected residual (salvage) value of $50,000. Parneet uses straight-line depreciation. An appraisal of the equipment on December 31, 2022 indicated a fair market value of $400,000 and a residual (salvage) value of $26,000. Instructions: a) Determine the annual depreciation expense for each year up to 2022. b) Determine the carrying amount (net book value) on December 31, 2022. c) Determine any impairment loss on December 31, 2022. If there is one, prepare the journal entry to record it. Assume all amounts are material ( substantial ) to Parneet.
On January 1, 2018, Parneet Fitness Centre paid $690,000 for exercise equipment that had an estimated useful life of 32 years and an expected residual (salvage) value of $50,000. Parneet uses straight-line
Instructions:
a) Determine the annual depreciation expense for each year up to 2022.
b) Determine the carrying amount (net book value) on December 31, 2022.
c) Determine any impairment loss on December 31, 2022. If there is one, prepare the
d) Compare the accounting procedures for the reversal of impairment losses under ASPE and IFRS.
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