QUESTION 1. SheridanEnterprises Ltd. purchased machinery on January 1, 2015. The machinery cost $269,000, and was estimated to have a ten-year useful life and a residual value of $52,000. Straight-line depreciation was recorded each year-end (December 31) to the end of December 31, 2019. On January 1, 2020,Sheridanre-evaluated the machinery. It was now believed that the equipment's total life was expected to be 15 years.

Prepare the journal entry to record depreciation for 2020.

QUESTION 2. BlueCorp., a small company that follows ASPE, owns machinery that cost $935,000and has accumulated depreciation of $415,000. The undiscounted future net cash flows from the use of the asset are expected to be $487,000. The equipment's fair value is $435,000. Using the cost recovery impairment model, prepare the journal entry, if any, to record the impairment loss.