PPE Impairments, non-reversal of previously recorded impairments Part 1: On January 1, 2020, Petro Garcia Inc. purchased with cash equipment with that cost $500,000 with
PPE Impairments, non-reversal of previously recorded impairments
Part 1: On January 1, 2020, Petro Garcia Inc. purchased with cash equipment with that cost $500,000 with a salvage value of $50,000 and an 9-year useful life. On December 31, 2021, after adjusting for straight-line depreciation, management projected the equipments future net cash flows to be $300,000 and its fair value to be $230,000. For 2022 and beyond, management also reduced the equipments useful life to a total of 5 years.
Prepare all journal entries related to this equipment for Petro Garcia Inc.
| Date | Account | Debit | Credit |
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| 01/01/2020 |
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| 12/31/2020 |
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| 12/31/2021 |
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| 12/31/2021 |
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| 12/31/2022 |
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| 12/31/2023 |
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| 12/31/2024 |
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| Part 2: | What is the book value of the equipment on January 1, 2023? | $ |
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Authors: Mohammad Nurunnabi
1st Edition
1801174415, 9781801174411
