Question
Presented below is information related to equipment owned by Ivanhoe Company at December 31, 2017. Cost $10,080,000 Accumulated depreciation to date 1,120,000 Expected future net
Presented below is information related to equipment owned by Ivanhoe Company at December 31, 2017.
Cost $10,080,000 Accumulated depreciation to date 1,120,000 Expected future net cash flows 7,840,000 Fair value 5,376,000
Ivanhoe intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,400. As of December 31, 2017, the equipment has a remaining useful life of 5 years.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit Dec. 31
SHOW LIST OF ACCOUNTS LINK TO TEXT
Prepare the journal entry (if any) to record depreciation expense for 2018. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation Debit Credit
SHOW LIST OF ACCOUNTS LINK TO TEXT
The asset was not sold by December 31, 2018. The fair value of the equipment on that date is $5,936,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $22,400. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit Dec. 31
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started