The information that follows relates to equipment owned by Sweet Acacia 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) (a) Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation. 1. 2. $9,900,000 1,100,000 7,700,000 6,985,000 Your answer is partially correct. Assume that Sweet Acacia is a private company that follows ASPE. 3. 6,820,000 55,000 Prepare the journal entry at December 31, 2023, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2024. The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase in fair value.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Sweet Acacia 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)
(a)
Assume that
1.
2.
3.
Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful
life of four years. Sweet Acacia uses the straight-line method of depreciation.
Your answer is partially correct.
(1)
(2)
No. Date Account Titles and Explanation
(3)
$9,900,000
December
31, 2023
1,100,000
veet Acacia 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.)
December
31, 2024
7,700,000
December
31, 2024
6,985,000
Prepare the journal entry at December 31, 2023, to record asset impairment, if any.
Prepare the journal entry to record depreciation expense for 2024.
The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase
in fair value.
Loss on Impairment
6,820,000
55,000
Debit
01
Credit
Transcribed Image Text:The information that follows relates to equipment owned by Sweet Acacia 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) (a) Assume that 1. 2. 3. Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation. Your answer is partially correct. (1) (2) No. Date Account Titles and Explanation (3) $9,900,000 December 31, 2023 1,100,000 veet Acacia 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.) December 31, 2024 7,700,000 December 31, 2024 6,985,000 Prepare the journal entry at December 31, 2023, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2024. The equipment's fair value at December 31, 2024, is $7.15 million. Prepare the journal entry, if any, to record the increase in fair value. Loss on Impairment 6,820,000 55,000 Debit 01 Credit
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