Question

Exercise 11-16 Presented below is information related to equipment owned by Shamrock Company at December 31,...

Exercise 11-16

Presented below is information related to equipment owned by Shamrock Company at December 31, 2017.
Cost $10,260,000
Accumulated depreciation to date 1,140,000
Expected future net cash flows 7,980,000
Fair value 5,472,000

Assume that Shamrock will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 5 years.
A. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Debit

Credit

Dec. 31
B. The fair value of the equipment at December 31, 2018, is $5,814,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Debit

Credit

Dec. 31


Homework Answers

Answer #1

A)31 dec Impariment DR $3,648,000

To Asset Cr $3,648,000

B)Asset Dr $ 342,000

To Impairment Cr $ 342,000

asset is recorded at lower of historial cost or fair market value

if the fair market value increaes then impairment account can be reversed only upto the extent we have debited it

working

particular s amount
cost $1,02,60,000.00
accumulated dep $11,40,000.00
$91,20,000.00
fair value $54,72,000.00
impariment $36,48,000.00
book value $18,24,000.00
fair value $58,14,000.00
difif $3,42,000.00
I hope my workings are enough to undertstand
please give the positive ratings if you are satisfied with answers
for any clarification feel free to comment on it
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Presented below is information related to equipment owned by Whispering Company at December 31, 2017. Cost...
Presented below is information related to equipment owned by Whispering Company at December 31, 2017. Cost $10,350,000 Accumulated depreciation to date 1,150,000 Expected future net cash flows 8,050,000 Fair value 5,520,000 Assume that Whispering will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required,...
Presented below is information related to equipment owned by Cullumber Company at December 31, 2017. Cost...
Presented below is information related to equipment owned by Cullumber Company at December 31, 2017. Cost $10,440,000 Accumulated depreciation to date 1,160,000 Expected future net cash flows 8,120,000 Fair value 5,568,000 Cullumber intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $23,200. As of December 31, 2017, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Ivanhoe Company at December 31, 2017. Cost  ...
Presented below is information related to equipment owned by Ivanhoe Company at December 31, 2017. Cost       $10,080,000 Accumulated depreciation to date       1,120,000 Expected future net cash flows       7,840,000 Fair value       5,376,000 Ivanhoe intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,400. As of December 31, 2017, the equipment has a remaining useful life of 5 years.    Prepare the journal entry (if any) to...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by Waterway Company at December 31, 2020. Cost $10,710,000 Accumulated depreciation to date 1,190,000 Expected future net cash flows 8,330,000 Fair value 5,712,000 Waterway intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $23,800. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to equipment owned by Sheridan Company at December 31, 2017. Cost...
Presented below is information related to equipment owned by Sheridan Company at December 31, 2017. Cost $9,720,000 Accumulated depreciation to date 1,080,000 Expected future net cash flows 7,560,000 Fair value 5,184,000 Assume that Sheridan will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 5 years. a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is...
Presented below is information related to equipment owned by Cullumber Company at December 31, 2017. Cost...
Presented below is information related to equipment owned by Cullumber Company at December 31, 2017. Cost $10,890,000 Accumulated depreciation to date 1,210,000 Expected future net cash flows 8,470,000 Fair value 5,808,000 Cullumber intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,200. As of December 31, 2017, the equipment has a remaining useful life of 4 years. a. Prepare the journal entry (if any) to record the impairment of...
resented below is information related to equipment owned by Pearl Company at December 31, 2017. Cost...
resented below is information related to equipment owned by Pearl Company at December 31, 2017. Cost $10,170,000 Accumulated depreciation to date 1,130,000 Expected future net cash flows 7,910,000 Fair value 5,424,000 Assume that Pearl will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years. a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is...
Presented below is information related to equipment owned by Wildhorse Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by Wildhorse Company at December 31, 2020. Cost $10,620,000 Accumulated depreciation to date 1,180,000 Expected future net cash flows 8,260,000 Fair value 5,664,000 Wildhorse intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $23,600. As of December 31, 2020, the equipment has a remaining useful life of 5 years. a.)Prepare the journal entry (if any) to record the impairment of the...
Presented below is information related to copyrights owned by Cullumber Company at December 31, 2020. Cost...
Presented below is information related to copyrights owned by Cullumber Company at December 31, 2020. Cost $8,590,000 Carrying amount 4,430,000 Expected future net cash flows 4,190,000 Fair value 3,330,000 Assume that Cullumber Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use...
Exercise 12-13 Presented below is information related to copyrights owned by Crane Company at December 31,...
Exercise 12-13 Presented below is information related to copyrights owned by Crane Company at December 31, 2020. Cost $8,530,000 Carrying amount 4,260,000 Expected future net cash flows 3,930,000 Fair value 3,580,000 Assume that Crane Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. A.) Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT