Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?
Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4.
Transcribed Image Text:Swifty Incorporated purchased
equipment for $1913000 in 2020.
Four years later accumulated
depreciation on the equipment
equals $510000. Improved
technology on this type of
equipment has impaired the value
of the equipment. Swifty plans to
continue to use the equipment
despite there being new
technology available. Future cash
flow are estimated to be
$1209000. The controller believes
the current fair value of the
equipment to be approximately
$604500. What journal entry is
needed by Swifty to record the
impairment on the equipment?
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