Presented below is information related to equipment owned by Sweet company at December 31, 2017

Cost $10,980,000

Accumulated depreciation 1,220,000

Expected Future net cash flows 8,540,000

Fair value 5,856,000

Sweet intends to dispose of the equipment in coming year. It is expected that the cost of disposal will be $24,400. As of December 31, 2017, the equipment has the remaining useful of life of 5 years .

Prepare the journal entry (if any) to record the impairment of the assets at December 31, 2017

Date Account Titles and Explanation Debit Credit

Dec 31 _____________________________________ _____________ _________________

______________________________________ _____________ _____________________

Prepare the journal entry (if any) to record depreciation expense for 2018.

Account titles and explanation Debit Credit

____________________________ _____________ _______________

________________________________ ______________ ______________________

The asset was not sold December 31, 2018. The fair value of the equipment on that date is $ 6,466,000. Prepare the journal entry (if any) necessary to record this increase in fair value. it is expected that the cost of disposal is still $ 24,400

Date Account Titles and explanation Debit Credit

Dec 31 ___________________________________ _____________ _____________________

______________________________________ _________________ ________________________