Question
1-Presented below is information related to equipment owned by Sarasota Company at December 31, 2017. Cost $10,710,000 Accumulated depreciation to date 1,190,000 Expected future net
1-Presented below is information related to equipment owned by Sarasota Company at December 31, 2017.
Cost | $10,710,000 | |
Accumulated depreciation to date | 1,190,000 | |
Expected future net cash flows | 8,330,000 | |
Fair value | 5,712,000 |
Assume that Sarasota 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. Prepare the journal entry to record depreciation expense for 2018-The fair value of the equipment at December 31, 2018, is $6,069,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
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