In 2007, Yorkshire Company purchased land and a building at a cost of $700,000, of which $150,000
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Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550,000
Accumulated Depreciation, Building . . . . . . . . . . . . . . . . . . . . . . . 150,000
On January 1, 2012, it is determined that there is toxic waste under the building and the future cash flows associated with the land and building are less than the recorded total book value for those two assets. The fair value of the land and building together is now only $120,000, of which $50,000 is land and $70,000 is the building. How should this impairment in value be recognized? Make the entry on January 1, 2012, to record the impairment of the land and building.
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Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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