The management of Skysong Inc., a small private company that uses the cost recovery impairment model,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The management of Skysong Inc., a small private company that uses the cost recovery impairment model, was discussing whether certain equipment should be written down as a charge to current operations because of obsolescence. The assets had a cost of $930,000, and depreciation of $400,000 had been taken to December 31, 2023. On December 31, 2023, management projected the undiscounted future net cash flows from this equipment to be $320,000, and its fair value to be $210,000. The company intends to use this equipment in the future. Prepare the journal entry, if any, to record the impairment at December 31, 2023. (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 0 for the amounts. List debit entry before credit entry.) Date December 31, 2023 Account Titles and Explanation Debit Credit At December 31, 2024, the equipment's fair value increased to $280,000. Prepare the journal entry, if any, to record this increase in fair value. (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 0 for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation December 21 2021 Debit Credit Assume instead that, as at December 31, 2023, the equipment was expected to have undiscounted future net cash flows of $560,000, and that its fair value was estimated to be $450,000. Prepare the journal entry to record the impairment at December 31, 2023, if any. (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 0 for the amounts. List debit entry before credit entry.) Date December 31, 2023 Account Titles and Explanation Debit Credit Assume instead that, as at December 31, 2023, the equipment was expected to have undiscounted future net cash flows of $44,000 per year for each of the next 10 years, and that there is no active market for the equipment. Skysong uses a 10% discount rate in its cash flow estimates. Prepare the journal entry to record impairment at December 31, 2023, if any. (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 0 for the amounts. List debit entry before credit entry. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 1,251.) Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Date Account Titles and Explanation December 31, 2023 Debit Credit The management of Skysong Inc., a small private company that uses the cost recovery impairment model, was discussing whether certain equipment should be written down as a charge to current operations because of obsolescence. The assets had a cost of $930,000, and depreciation of $400,000 had been taken to December 31, 2023. On December 31, 2023, management projected the undiscounted future net cash flows from this equipment to be $320,000, and its fair value to be $210,000. The company intends to use this equipment in the future. Prepare the journal entry, if any, to record the impairment at December 31, 2023. (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 0 for the amounts. List debit entry before credit entry.) Date December 31, 2023 Account Titles and Explanation Debit Credit At December 31, 2024, the equipment's fair value increased to $280,000. Prepare the journal entry, if any, to record this increase in fair value. (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 0 for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation December 21 2021 Debit Credit Assume instead that, as at December 31, 2023, the equipment was expected to have undiscounted future net cash flows of $560,000, and that its fair value was estimated to be $450,000. Prepare the journal entry to record the impairment at December 31, 2023, if any. (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 0 for the amounts. List debit entry before credit entry.) Date December 31, 2023 Account Titles and Explanation Debit Credit Assume instead that, as at December 31, 2023, the equipment was expected to have undiscounted future net cash flows of $44,000 per year for each of the next 10 years, and that there is no active market for the equipment. Skysong uses a 10% discount rate in its cash flow estimates. Prepare the journal entry to record impairment at December 31, 2023, if any. (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 0 for the amounts. List debit entry before credit entry. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 1,251.) Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Date Account Titles and Explanation December 31, 2023 Debit Credit
Expert Answer:
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
Students also viewed these accounting questions
-
using PRACTICE EXERCISE 3 Classify each of the following account names as an asset, liability, equity, revenue, or expense. Account Name Class 1. Land - A 2. Income Tax Payable 7 3. Property Taxes y...
-
Does your state allow for a jury trial on the issue of determining paternity? 2. Is the paternity procedure begun in your state with a complaint, a petition, or some other pleading? 3. Does your...
-
The management of Luis Inc., a small private company that uses the cost recovery impairment model, was discussing whether certain equipment should be written down as a charge to current operations...
-
Write a brief paper on the following topic: "Why have gasoline prices risen so high in the recent years?" Write down the reasons and divide into supply and demand effects on the market. Describe the...
-
What are the seven steps for proofreading a document systematically to locate all errors?
-
A 1.6-kg mass attached to a spring oscillates with an amplitude of 7.3 cm and a frequency of 2.8 Hz. What is its energy of motion?
-
Low Company has a unit selling price of \($400\), variable costs per unit of \($280\), and fixed costs of \($150,000\), Compute the break-even point in units using (a) the mathematical equation (b)...
-
Techtra makes electronic components used by other firms in a wide variety of end products. Initially the firm bid for any type of electronic assembly work that became available (mostly subcontract...
-
Question 31 (8 points) Explain this Problem clearly: Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation's records provide the following information....
-
No- State Insurance Company has made the following estimate of auto damage for several groups of potential customers who own cars worth $10,000. There are an equal number of customers in each group....
-
QUESTION TWO [15] Conflict can be avoided, and it can be defused (amongst other things). With reference to any conflict that you have observed in educational leadership, discuss the following: - The...
-
the following comparative information is provided for ghost train company, which uses a perpetual inventory system. the company controller is considering the impact of its choice to use the FIFO...
-
Examine the challenges and opportunities associated with the integration of advanced data analytics and artificial intelligence (AI) technologies in construction management processes, including...
-
Imagine that you will receive NOK 500 every year forever, but that the first payment will come in two years. What required return must you use for the present value (today) of this to be NOK 12,000?...
-
A non-investment grade company wants to borrow money. It is considering two options: (i) issuing a 144a high-yield bond, or (ii) issuing a leveraged loan. The company is certain that interest rates...
-
A car starts the motion and after 6 second its velocity reachs to 7 5 mi / hr . Then this car coast for 3 minutes. Then driver pushes the brake and car deccelerates by 4 m / s 2 unitl it stops. Find...
-
Use a graphing calculator to find a linear regression model for the men's 100-meter freestyle data given in the table on the right, where x is years since 1980 and y is winning time (in seconds). Do...
-
Fill in each blank so that the resulting statement is true. 83 + 103 = ______ .
-
How many months does it take to save $200,000.00 based on the information provided in this problem?---
-
What is the amount oi the credit to employee city income tax payable?
-
Milat is the total yearly gross pay for all employees?
Study smarter with the SolutionInn App