Low-fare airline, easyJet plc, is based in London, England. Its destinations include popular vacation spots and business centres throughout Europe, North Africa, and the Middle East.

The following note and information were reported in a recent annual report:

During the year, easyJet wrote down certain buildings, machinery, and equipment to their fair value. The impairment loss was included in the reported depreciation expense for the year.
Required:
1. Reconstruct the journal entry for the disposal of property and equipment during the year.
2. Compute the amount of property and equipment that easyJet wrote off as impaired during the year. (Hint: Set up T-accounts.)

Transcribed Image Text:

Cost of property, piant, and equipment (beginning of year) Cost of property, piant, and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Dollars in millions 1,216.9 1,636.3 515.0 114.3 177.5 Depreciation expense during the year 55.4 Cost of property and equipment sold during the year 10.1 Accumulated depreciation on property and equipment sold Gain on disposal of property and equipment sold 5.2 7.5