Please answer the following question Must choose from the following LIST OF ACCOUNTS: Accumulated DepletionAccumulated Depreciation - AutomobilesAccumulated Depreciation - BuildingsAccumulated Depreciation - EquipmentAccumulated Depreciation - Furniture and FixturesAccumulated Depreciation - MachineryAccumulated Depreciation - VehiclesAccumulated Impairment Losses - BuildingAccumulated Impairment Losses - EquipmentAccumulated Impairment Losses - LandAccumulated Impairment Losses - MachineryAccumulated Impairment Losses - MineAccumulated Impairment Losses - PatentsAccumulated Impairment Losses - Tools and DiesAccumulated Impairment Losses - VehiclesAsset Retirement ObligationBuildingsCashCommon SharesContribution ExpenseCost of Goods SoldDeferred Revenue - Government GrantsDepreciation ExpenseEquipmentFurniture and FixturesGain on Disposal of AutomobilesGain on Disposal of BuildingGain on Disposal of EquipmentGain on Disposal of Furniture and FixturesGain on Disposal of MachineryGain on Disposal of VehiclesGain on Sale of LandInterest ExpenseInterest PavableInventoryInvestment PropertyLandLiability for Site RestorationLoss on Disposal of AutomobilesLoss on Disposal of BuildingLoss on Disposal of EquipmentLoss on Disposal of MachineryLoss on Disposal of VehiclesLoss on ExpropriationLoss on ImpairmentLoss on Sale of LandMachineryMineral ResourcesNo EntryNotes PayableOil PropertyRecovery of Loss from ImpairmentRepairs and Maintenance ExpenseRetained EarningsRevaluation Surplus (OCI)Revenue - Government GrantsRoyalty ExpenseVehicles The information that follows relates to equipment owned by Buffalo Limited at December 31, 2023:CostAccumulated depreciation to dateExpected future net cash flows (undiscounted)Expected future net cash flows (discounted, value in use)Fair valueCosts to sell (costs of disposal)(a1-a3)1.At December 31, 2023, Buffalo discontinues use of the equipment and intends to dispose of it in the coming year by selling it to acompetitor. It is expected that the costs of disposal will total $54,000.2.3.Your answer is correct.Assume that Buffalo is a private company that follows ASPE. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debitentries before credit entries.)(2)No. Account Titles and Explanation(1)(3)Loss on ImpairmentAccumulated Impairment Losses - EquipmentPrepare the journal entry at December 31, 2023, to record asset impairment, if any.Prepare the journal entry to record depreciation expense for 2024.Assume that the asset was not sold by December 31, 2024. The equipment's fair value (and recoverable amount) on thisdate is $7.02 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs ofdisposal will total $54,000.No Entry$9,720,0001,080,0007,560,000No Entry6,858,000Accumulated Impairment Losses - Equipment6,696,000Recovery of Loss from Impairment54,000Debit1998000324000Credit19980000324000 Repeat the requirements in (a) above assuming that Buffalo is a public company that follows IFRS, and that the asset meets allcriteria for classification as an asset held for sale. (Credit account titles are automatically indented when the amount is entered. Do notindent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries beforecredit entries.)No. Account Titles and Explanation(1)(2)(3)DebitCredit

Under IFRS, Impairment loss is the amount by which the carrying amount of the asset exceeds its…

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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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Please answer the following question

Must choose from the following LIST OF ACCOUNTS:

Accumulated Depletion

Accumulated Depreciation - Automobiles

Accumulated Depreciation - Buildings

Accumulated Depreciation - Equipment

Accumulated Depreciation - Furniture and Fixtures

Accumulated Depreciation - Machinery

Accumulated Depreciation - Vehicles

Accumulated Impairment Losses - Building

Accumulated Impairment Losses - Equipment

Accumulated Impairment Losses - Land

Accumulated Impairment Losses - Machinery

Accumulated Impairment Losses - Mine

Accumulated Impairment Losses - Patents

Accumulated Impairment Losses - Tools and Dies

Accumulated Impairment Losses - Vehicles

Asset Retirement Obligation

Buildings

Cash

Common Shares

Contribution Expense

Cost of Goods Sold

Deferred Revenue - Government Grants

Depreciation Expense

Equipment

Furniture and Fixtures

Gain on Disposal of Automobiles

Gain on Disposal of Building

Gain on Disposal of Equipment

Gain on Disposal of Furniture and Fixtures

Gain on Disposal of Machinery

Gain on Disposal of Vehicles

Gain on Sale of Land

Interest Expense

Interest Pavable

Inventory

Investment Property

Land

Liability for Site Restoration

Loss on Disposal of Automobiles

Loss on Disposal of Building

Loss on Disposal of Equipment

Loss on Disposal of Machinery

Loss on Disposal of Vehicles

Loss on Expropriation

Loss on Impairment

Loss on Sale of Land

Machinery

Mineral Resources

No Entry

Notes Payable

Oil Property

Recovery of Loss from Impairment

Repairs and Maintenance Expense

Retained Earnings

Revaluation Surplus (OCI)

Revenue - Government Grants

Royalty Expense

Vehicles

The information that follows relates to equipment owned by Buffalo Limited at December 31, 2023:
Cost
Accumulated depreciation to date
Expected future net cash flows (undiscounted)
Expected future net cash flows (discounted, value in use)
Fair value
Costs to sell (costs of disposal)
(a1-a3)
1.
At December 31, 2023, Buffalo discontinues use of the equipment and intends to dispose of it in the coming year by selling it to a
competitor. It is expected that the costs of disposal will total $54,000.
2.
3.
Your answer is correct.
Assume that Buffalo is a private company that follows ASPE. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit
entries before credit entries.)
(2)
No. Account Titles and Explanation
(1)
(3)
Loss on Impairment
Accumulated Impairment Losses - Equipment
Prepare the journal entry at December 31, 2023, to record asset impairment, if any.
Prepare the journal entry to record depreciation expense for 2024.
Assume that the asset was not sold by December 31, 2024. The equipment's fair value (and recoverable amount) on this
date is $7.02 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of
disposal will total $54,000.
No Entry
$9,720,000
1,080,000
7,560,000
No Entry
6,858,000
Accumulated Impairment Losses - Equipment
6,696,000
Recovery of Loss from Impairment
54,000
Debit
1998000
324000
Credit
1998000
0
324000

Repeat the requirements in (a) above assuming that Buffalo is a public company that follows IFRS, and that the asset meets all
criteria for classification as an asset held for sale. (Credit account titles are automatically indented when the amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before
credit entries.)
No. Account Titles and Explanation
(1)
(2)
(3)
Debit
Credit

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