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The information that follows relates to equipment owned by Bonita Limited at December 31, 2020: Cost $6,660,000 Accumulated depreciation to date 740,000 Expected future net
The information that follows relates to equipment owned by Bonita Limited at December 31, 2020: Cost $6,660,000 Accumulated depreciation to date 740,000 Expected future net cash flows (undiscounted) 5,180,000 Expected future net cash flows (discounted, value in use) 4,699,000 Fair value 4,588,000 Costs to sell (costs of disposal) 37,000 Assume that Bonita will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life of four years. Bonita uses the straight-line method of depreciation. Repeat the requirements in (a) above assuming that Bonita is a public company that follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Loss on Impairment 1221000 Accumulated Impairment Losses - Equipment 1221000 Depreciation Expense 1174750 Accumulated Depreciation - Equipment 1174750 Accumulated Impairment Losses - Equipment 1221000 Recovery of Loss from Impairment 1221000 The information that follows relates to equipment owned by Bonita Limited at December 31, 2020: Cost $6,660,000 Accumulated depreciation to date 740,000 Expected future net cash flows (undiscounted) 5,180,000 Expected future net cash flows (discounted, value in use) 4,699,000 Fair value 4,588,000 Costs to sell (costs of disposal) 37,000 Assume that Bonita will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life of four years. Bonita uses the straight-line method of depreciation. Repeat the requirements in (a) above assuming that Bonita is a public company that follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Loss on Impairment 1221000 Accumulated Impairment Losses - Equipment 1221000 Depreciation Expense 1174750 Accumulated Depreciation - Equipment 1174750 Accumulated Impairment Losses - Equipment 1221000 Recovery of Loss from Impairment 1221000
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