Hirsch Company acquired equipment at the beginning of 2020 at a cost of $142,200. The equipment has a six-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2020, Hirsch compiled the following information related to this equipment: Expected future cash flows from use of the equipment$123,500 Present value of expected future cash flows from use of the equipment 108,900 Fair value (selling price less costs to dispose) 105,820 Assume that Hirsch Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes. Required:Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS.Prepare the entry(ies) that Hirsch would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS. Ignore the possibility of any additional impairment at the end of 2021. Required A Required BPrepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and(2) IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)View transaction listJournal entry worksheet< 1Record the entry for the purchase of equipment as per U.S. GAAP.Note: Enter debits before credits.Date<Journal entry worksheet12 3 4 5 6Date12/31/2020<Note: Enter debits before credits.12Journal entry worksheetDate01/01/2020Record the entry for the expense on depreciation of equipment as per U.S.GAAP.General Journal2Date12/31/2020Note: Enter debits before credits.3 4 5 6View transaction list3Journal entry worksheet< 1 2Date12/31/2020Note: Enter debits before credits.General Journal3Date12/31/2020Record the entry for the purchase of equipment as per IFRS.Record entry4Journal entry worksheet< 1 23Note: Enter debits before credits.3General Journal4Note: Enter debits before credits.7 85Journal entry worksheet< 1 2General Journal454Record the entry for the expense on depreciation of equipment as per IFRS.5General JournalDebit56General Journal6Clear entry7Credit66778Record the entry for the loss on impairment of equipment as per IFRS.7Debit78Debit8Debit>88CreditDebitRecord the entry for the loss on impairment of equipment as per U.S. GAAP.CreditDebitCreditCreditCreditView general journal>> Journal entry worksheet< 1 2 3Note: Enter debits before credits.Date12/31/2021Record the entry for the expense on depreciation of equipment as per U.S.GAAP.Note: Enter debits before credits.Date12/31/2021Journal entry worksheet< 1 2 3 4 5 6Decord ontni1Journal entry worksheetDate12/31/2020Note: Enter debits before credits.<Record the entry for the expense on depreciation of equipment as per IFRS.View transaction list213Date12/31/2021Journal entry worksheet243Note: Enter debits before credits.Date12/31/2021General Journal25General Journal3Record the entry for the loss on impairment of equipment due to conversionfrom U.S. GAAP to IFRS.General JournalJournal entry worksheet< 1Note: Enter debits before credits.67General Journal7< Required A8General JournalDebit8Record the entry for the loss on impairment of equipment due to conversionfrom U.S. GAAP to IFRS.DebitDebitCreditDebitCreditView SOPOraliournalDebitRequired B >Record the entry for reversing additional depreciation already recognized dueto conversion from U.S. GAAP to IFRSCreditCreditCredit>>>>>

Journal entries are those entries that include the daily transactions or events and are stated in…

Answered: Prepare journal entries for this…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hirsch Company acquired equipment at the beginning of 2020 at a cost of $142,200. The equipment has a six-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2020, Hirsch compiled the following information related to this equipment:


Expected future cash flows from use of the equipment	$	123,500
Present value of expected future cash flows from use of the equipment		108,900
Fair value (selling price less costs to dispose)		105,820

Assume that Hirsch Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS.
Prepare the entry(ies) that Hirsch would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS. Ignore the possibility of any additional impairment at the end of 2021.

Journal entry worksheet
< 1 2 3
Note: Enter debits before credits.
Date
12/31/2021
Record the entry for the expense on depreciation of equipment as per U.S.
GAAP.
Note: Enter debits before credits.
Date
12/31/2021
Journal entry worksheet
< 1 2 3 4 5 6
Decord ontni
1
Journal entry worksheet
Date
12/31/2020
Note: Enter debits before credits.
<
Record the entry for the expense on depreciation of equipment as per IFRS.
View transaction list
2
1
3
Date
12/31/2021
Journal entry worksheet
2
4
3
Note: Enter debits before credits.
Date
12/31/2021
General Journal
2
5
General Journal
3
Record the entry for the loss on impairment of equipment due to conversion
from U.S. GAAP to IFRS.
General Journal
Journal entry worksheet
< 1
Note: Enter debits before credits.
6
7
General Journal
7
< Required A
8
General Journal
Debit
8
Record the entry for the loss on impairment of equipment due to conversion
from U.S. GAAP to IFRS.
Debit
Debit
Credit
Debit
Credit
View SOPOraliournal
Debit
Required B >
Record the entry for reversing additional depreciation already recognized due
to conversion from U.S. GAAP to IFRS
Credit
Credit
Credit
>
>
>
>
>

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