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Presented below is information related to equipment owned by L Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,350,000 1,150,000 8,050,000 5,520,000

Presented below is information related to equipment owned by L Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,350,000 1,150,000 8,050,000 5,520,000

FINANCIAL ACCOUNTING
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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Current Attempt in Progress Presented below is information related to equipment owned by Vaughn Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,350,000 1,150,000 8,050,000 5,520,000 Assume that Vaughn will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful life of 4 years.
Transcribed Image Text:Current Attempt in Progress Presented below is information related to equipment owned by Vaughn Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,350,000 1,150,000 8,050,000 5,520,000 Assume that Vaughn will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful life of 4 years.
(b) (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (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. List debit entry before credit entry.) Date Dec. 31 Account Titles and Explanation Loss on Impairment Accumulated Depreciation Equipment Account Titles and Explanation I Debit Debit 3,680,000 Prepare the journal entry to record depreciation expense for 2026. (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. List debit entry before credit entry.) Credit Credit 3,680,000
Transcribed Image Text:(b) (a) Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (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. List debit entry before credit entry.) Date Dec. 31 Account Titles and Explanation Loss on Impairment Accumulated Depreciation Equipment Account Titles and Explanation I Debit Debit 3,680,000 Prepare the journal entry to record depreciation expense for 2026. (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. List debit entry before credit entry.) Credit Credit 3,680,000
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