5 Required: Using the data and chart of accounts below, calculate the required items related to depreciation, impairment, and impairment restoration; and prepare the related journal entries. Tips: This spreadsheet contains macros which will provide realtime feedback on EACH cell in the blue shaded area. Your score on the assignment will be 6 calculated based upon the % of the 11 cells that are completed correctly. Use cell referencing where you can and work in order (i.e. start with requirement a). 7 8 Company Background Information: Rainier Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $10,500,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescense of Rainer's equipment. At that time, Rainier's controller estimates that expected future net cash flows on the equipment will be $6,300,000 and that the fair value of the equipment is $5,600,000. Rainier intends to continue 9 using the equipment, but it is estimated that the remaining useful life is 4 years. Rainier uses straight-line depreciation. 10 Data highlights from background information: 11 Equipment purchase price 12 Original estimated useful life (in years) 13 Expected future cash flows at 12/31/25 $10,500,000 8 $6,300,000 $5,600,000 15 Estimated remaining useful life after 12/31/25 (years) 10 17 Required: 14 Fair value at 12/31/25 Partial Chart of Accounts Cash Equipment Recovery of Loss from Impairment Depreciation Expense Accumulated Depreciation Accounts Payable Loss on Impairment Record answers here: 18 a. Calculate the annual depreciation expense amount that will be recorded for 2024. 19 b. Calculate the carrying value (book value) of the equipment as of 12/31/25 (prior to impairment). 20 c. Recoverability Test: Calculate the difference between the sum of undiscounted future cash flows and the asset's carrying amount. a b 21 (This is to determine the answer to the question: Is the sum of undiscounted future cash flows less than the asset's carrying amount? (If your answer is yes, there is impairment.) 22 d. Prepare the journal entry (if any) to record the impairment loss at 12/31/25. d Account Name DR CR 23 e. Calculate the annual depreciation expense amount for 2026. 24 f. Calculate the carrying value of the equipment at 12/31/26 (inclusive of the 2026 depreciation). 25 26 f