A construction company was forced to sell its trucks after one year due to the termination...
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A construction company was forced to sell its trucks after one year due to the termination of contract via Mendi-Tambul road. The construction company had been using a 20-year straight- line depreciation method for these trucks. The net book value before discovering this impairment was K1,000,000. The truck's manufacturer found a buyer who was willing to pay K500,000 for the trucks. The construction company was also required to pay K50,000 to have the trucks transported to this new owner. Required: 1. What was the; Depreciated amount after one year? Fair value? Cost of disposal? Carrying amount? Impairment? 2. What is the RECOVEABLE AMOUNT? 3. Prepare the Journal Entry. A construction company was forced to sell its trucks after one year due to the termination of contract via Mendi-Tambul road. The construction company had been using a 20-year straight- line depreciation method for these trucks. The net book value before discovering this impairment was K1,000,000. The truck's manufacturer found a buyer who was willing to pay K500,000 for the trucks. The construction company was also required to pay K50,000 to have the trucks transported to this new owner. Required: 1. What was the; Depreciated amount after one year? Fair value? Cost of disposal? Carrying amount? Impairment? 2. What is the RECOVEABLE AMOUNT? 3. Prepare the Journal Entry.
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