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 Date $10,350,000 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. Dec. 31 1,150,000 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.) 8,050,000 5,520,000 Loss on Impairment Account Titles and Explanation Accumulated Depreciation - Equipment Debit 3680000 Credit 3680000
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 Date $10,350,000 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. Dec. 31 1,150,000 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.) 8,050,000 5,520,000 Loss on Impairment Account Titles and Explanation Accumulated Depreciation - Equipment Debit 3680000 Credit 3680000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Munabhai
Transcribed Image Text: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
Dec. 31
4
Loss on Impairment
8,050,000
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.
5,520,000
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 Account Titles and Explanation
Accumulated Depreciation - Equipment
Debit
3680000
Credit
3680000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education