Question
Presented below is information related to equipment owned by Bridgeport Company at December 31, 2017. Cost $9,990,000 Accumulated depreciation to date 1,110,000 Expected future net
Presented below is information related to equipment owned by Bridgeport Company at December 31, 2017.
| Cost | $9,990,000 | |
| Accumulated depreciation to date | 1,110,000 | |
| Expected future net cash flows | 7,770,000 | |
| Fair value | 5,328,000 |
Assume that Bridgeport 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 to record depreciation expense for 2018.
The fair value of the equipment at December 31, 2018, is $5,661,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
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Survey of Accounting
Authors: Carl S Warren
6th edition
978-113318912, 1133189121, 978-1133189121
