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Your answer is partially correct. Assume that Sweet 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.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. 3. Assume that the asset was not sold by December 31, 2021. The equipment's fair value (and recoverable amount) on this date is $6.44 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $49,500. No. Account Titles and Explanation (1) Loss on Impairment Accumulated Impairment Losses - Equipment (2) No Entry No Entry Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment Debit Credit 1,831,500 1,831,500 302,000 302,000

Your answer is partially correct. Assume that Sweet 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.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. 3. Assume that the asset was not sold by December 31, 2021. The equipment's fair value (and recoverable amount) on this date is $6.44 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $49,500. No. Account Titles and Explanation (1) Loss on Impairment Accumulated Impairment Losses - Equipment (2) No Entry No Entry Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment Debit Credit 1,831,500 1,831,500 302,000 302,000

FINANCIAL ACCOUNTING
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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kau.3

answer must be in table format or i will give down vote 

The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2020:

Cost   $8,910,000
Accumulated depreciation to date   990,000
Expected future net cash flows (undiscounted)   6,930,000
Expected future net cash flows (discounted, value in use)   6,286,500
Fair value   6,138,000
Costs to sell (costs of disposal)   49,500


At December 31, 2020, Sweet Acacia 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 $49,500.

 

 

 

Your answer is partially correct. Assume that Sweet 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.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. 3. Assume that the asset was not sold by December 31, 2021. The equipment's fair value (and recoverable amount) on this date is $6.44 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $49,500. No. Account Titles and Explanation (1) Loss on Impairment Accumulated Impairment Losses - Equipment (2) No Entry No Entry Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment Debit Credit 1,831,500 1,831,500 302,000 302,000
Transcribed Image Text:Your answer is partially correct. Assume that Sweet 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.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. 3. Assume that the asset was not sold by December 31, 2021. The equipment's fair value (and recoverable amount) on this date is $6.44 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $49,500. No. Account Titles and Explanation (1) Loss on Impairment Accumulated Impairment Losses - Equipment (2) No Entry No Entry Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment Debit Credit 1,831,500 1,831,500 302,000 302,000
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