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As of December 3 1 , 2 0 2 5 , Winger Company has Equipment ( an asset ) that had an original cost of

As of December 31,2025, Winger Company has Equipment (an asset) that had an original cost of $674,000 and depreciation taken to date of $86,000. Management has decided that a triggering event has occurred, and the asset should be further evaluated for impairment. Management projected its future net cash flows from this equipment to be $532,000 and its fair value to be $312,800. The equipment has a remaining useful life of four years and no salvage value.
Required: Assume that Winger Company will continue to use this asset in the future.
a. Prepare the journal entry (if any) to record the impairment of the asset at December 31,2025. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[12/31/25.,type your answer...,type your answer...,type your answer...],[,type your answer...,type your answer...,type your answer...]]
b. Prepare the journal entry (if any) to record depreciation expense for 2026. Use the straight-line method. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?26,type your answer...,type your answer...,type your answer...],[,type your answer...,type your answer...,type your answer...]]
c. The fair value of the equipment at December 31,2026, is $356,100. Prepare the journal entry (if any) necessary to record this increase in fair value. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?26,type your answer...,type your answer...,type your answer...],[,type your answer...,type your answer...,type your answer...]]
Required: Assume that Winger Company intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $48,000.
d. Prepare the journal entry (if any) to record the impairment of the asset at December 31,2025. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?26,type your answer...,type your answer...,type your answer...],[,type your answer...,type your answer...,type your answer...]]
e. Prepare the journal entry (if any) to record depreciation expense for 2026. Use the straight-line method. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?26,type your answer...,type your answer...,type your answer...],[,type your answer...,type your answer...,type your answer...]]
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