Presented below is information related to equipment owned by Coronado Company at December 31, 2020. Cost $10,080,000 Accumulated depreciation to date 1,120,000 Expected future net cash flows 7,840,000 Fair value 5,376,000 Coronado intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,400. As of December 31, 2020, the equipment has a remaining useful life of 5 years. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (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.) Date Account Titles and Explanation Debit Credit Dec. 31 Loss on Impairment 3606400 Accumulated Depreciation-Equipment 3606400
Presented below is information related to equipment owned by Coronado Company at December 31, 2020. Cost $10,080,000 Accumulated depreciation to date 1,120,000 Expected future net cash flows 7,840,000 Fair value 5,376,000 Coronado intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,400. As of December 31, 2020, the equipment has a remaining useful life of 5 years. (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (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.) Date Account Titles and Explanation Debit Credit Dec. 31 Loss on Impairment 3606400 Accumulated Depreciation-Equipment 3606400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Only need help with part C.
Transcribed Image Text:Presented below is information related to equipment owned by Coronado Company at December 31, 2020.
Cost
$10,080,000
Accumulated depreciation to date
1,120,000
Expected future net cash flows
7,840,000
Fair value
5,376,000
Coronado intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,400. As of
December 31, 2020, the equipment has a remaining useful life of 5 years.
(a)
Your answer is correct.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (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.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
Loss on Impairment
3606400
Accumulated Depreciation-Equipment
3606400
Transcribed Image Text:Your answer is partially correct.
The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $5,936,000. Prepare the journal
entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $22,400. (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.)
Debit
Credit
Date
Account Titles and Explanation
Dec. 31
No Entry
No Entry
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