Safety-First Company completed all of its October 31, 2020, adjustments in preparation for preparing its financial statements,

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Safety-First Company completed all of its October 31, 2020, adjustments in preparation for preparing its financial statements, which resulted in the following trial balance.

Account ................................................................................................ Balance
Accounts payable ................................................................................ $ 11,220
Accounts receivable ............................................................................ 19,800
Accumulated depreciation, building ................................................. 79,200
Accumulated depreciation, equipment ............................................ 37,400
Accumulated depreciation, furniture ................................................ 20,900
Allowance for doubtful accounts ....................................................... 880
Building ................................................................................................. 136,400
Cash ....................................................................................................... 11,000
Equipment ............................................................................................ 90,200
Expenses, including cost of goods sold ............................................ 761,200
Furniture ............................................................................................... 50,600
Land ....................................................................................................... 105,600
Merchandise inventory ....................................................................... 35,200
Note payable ........................................................................................ 85,800
Sales ...................................................................................................... 904,200
Tarifa Sharma, capital ......................................................................... 62,480
Unearned revenues ............................................................................ 7,920


Other information:

1. All accounts have normal balances.

2. $26,400 of the note payable balance is due by October 31, 2021.

The final task in the year-end process was to assess the assets for impairment, which resulted in the following schedule.

Asset ...................................................................................... Recoverable Value
Land ........................................................................................................ $136,400
Building .................................................................................................. 105,600
Equipment ............................................................................................. 28,600
Furniture ................................................................................................ 15,400


Required

1. Prepare the entry (entries) to record any impairment losses at October 31, 2020. Assume the company recorded no impairment losses in previous years.

2. Prepare a classified balance sheet at October 31, 2020.

Analysis Component: What is the impact on the financial statements of an impairment loss?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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