Question
Presented below is information related to equipment owned by Crane Company at December 31, 2020. Cost $9,090,000 Accumulated depreciation to date 1,010,000 Expected future net
Presented below is information related to equipment owned by Crane Company at December 31, 2020.
| Cost | $9,090,000 | |
| Accumulated depreciation to date | 1,010,000 | |
| Expected future net cash flows | 7,070,000 | |
| Fair value | 4,848,000 |
Assume that Crane will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020
Prepare the journal entry to record depreciation expense for 2021.
The fair value of the equipment at December 31, 2021, is $5,151,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
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Auditing Cases An Interactive Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
5th International Edition
0132815591, 9780132815598
