Question
Identifying and Recording Impairment Loss on Plant Asset Three cases are provided below concerning a plant asset currently used in operations. Case Carrying Value Recoverable
Identifying and Recording Impairment Loss on Plant Asset
Three cases are provided below concerning a plant asset currently used in operations.
Case | Carrying Value | Recoverable Cost | Fair Value |
---|---|---|---|
A | $64,000 | $96,000 | $72,000 |
B | 72,000 | 104,000 | 64,000 |
C | 96,000 | 64,000 | 48,000 |
Required
a. Which case(s), if any, requires an impairment loss to be recognized, and for what amount? Assume that indicators of impairment are present in all cases. Note: If the asset is not impaired, enter a zero (or leave blank) for the loss. Note:Do not use negative signs with your answers.
Impairment Loss | |
---|---|
Case A | Answer |
Case B | Answer |
Case C | Answer |
b. Record the entry for the impairment loss on the case(s) identified in part a (if any). Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Account Name | Dr. | Cr. |
---|---|---|
Answer | Answer | |
AnswerCashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings--Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reveral of Impairment LossLoss on ImpairmentLoss on DisposalN/A | Answer | Answer |
Please answer all parts of the question. Options are CashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings--Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reveral of Impairment LossLoss on ImpairmentLoss on DisposalN/A
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