The information that follows relates to the assets of iber their year-end Canadian Company has the following asset that has been identified as needing to be tested for impairment. Equipment $110,000 $66,000 $48,500 Discounted future cash flows (value in u$36,000 $32,000 $3,000 Cost Accumulated depreciation Undiscounted future cash flows Fair value Costs to sell Remaining useful life in years Instructions: 1. Assume Canadian Company follows ASPE: D) Provide any required entries at December 31, 2020 regarding impairment for the Equipment Assume depreciation for 2020 has already been recorded. Ifno entry is required comment on why. Date Description Dr Show rough work here: b) Assume the fair value of the equipment is $33,000 at the end of 2021. Provide any required journal entry to recover impairment at this date. If no entry is required comment on why. Date Description Dr Cr Show rough work here: 2. Assume Canadian Company follows IFRS: D) Provide any required entries at December 31, 2020 regarding impairment for the Equipment Assume depreciation for 2020 has already been recorded. Ifno entry is required comment on why. Date |Description Dr Cr Show rough work here: b) Assume the fair value of the equipment less disposal costs is $41,000 at the end of 2021. Assume depreciation for 2020 has already been recorded. If no entry is required comment on why. Description Date Dr Cr Show rough work here:
The information that follows relates to the assets of iber their year-end Canadian Company has the following asset that has been identified as needing to be tested for impairment. Equipment $110,000 $66,000 $48,500 Discounted future cash flows (value in u$36,000 $32,000 $3,000 Cost Accumulated depreciation Undiscounted future cash flows Fair value Costs to sell Remaining useful life in years Instructions: 1. Assume Canadian Company follows ASPE: D) Provide any required entries at December 31, 2020 regarding impairment for the Equipment Assume depreciation for 2020 has already been recorded. Ifno entry is required comment on why. Date Description Dr Show rough work here: b) Assume the fair value of the equipment is $33,000 at the end of 2021. Provide any required journal entry to recover impairment at this date. If no entry is required comment on why. Date Description Dr Cr Show rough work here: 2. Assume Canadian Company follows IFRS: D) Provide any required entries at December 31, 2020 regarding impairment for the Equipment Assume depreciation for 2020 has already been recorded. Ifno entry is required comment on why. Date |Description Dr Cr Show rough work here: b) Assume the fair value of the equipment less disposal costs is $41,000 at the end of 2021. Assume depreciation for 2020 has already been recorded. If no entry is required comment on why. Description Date Dr Cr Show rough work here:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Looking for answers. Please include all the calculations for my reference. Thanks!
Transcribed Image Text:The information that follows relates to the assets of Canadian Company as at December 31,2020 (their year-end).
Canadian Company has the following asset that has been identified as needing to be tested for impairment.
Equipment
$110,000
$66,000
Cost
Accumulated depreciation
Undiscounted future cash flows
$48,500
Discounted future cash flows (value in u $36,000
$32,000
$3,000
Fair value
Costs to sell
Remaining useful life in years
5
Instructions:
1. Assume Canadian Company follows ASPE:
a) Provide any required entries at December 31, 2020 regarding impairment for the Equipment
Assume depreciation for 2020 has already been recorded. If no entry is required comment on why.
Date
Description
Dr
Cr
Show rough work here:
b) Assume the fair value of the equipment is $33,000 at the end of 2021.
Provide any required journal entry to recover impairment at this date. If no entry is required comment on why.
Date
Description
Dr
Cr
Show rough work here:
2. Assume Canadian Company follows IFRS:
a) Provide any required entries at December 31, 2020 regarding impairment for the Equipment
Assume depreciation for 2020 has already been recorded. If no entry is required comment on why.
Date
Description
Dr
Cr
Show rough work here:
b) Assume the fair value of the equipment less disposal costs is $41,000 at the end of 2021.
Assume depreciation for 2020 has already been recorded. If no entry is required comment on why.
Date
Description
Dr
Cr
Show rough work here:
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