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. List all debit entries before credit entries.) 1. 2. 3. Prepare the journal entry at December 31, 2023, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2024. Assume that the asset was not sold by December 31, 2024. The equipment's fair value (and recoverable amount) on this date is $5.72 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $44,000.
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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- The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2023: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) $3,600,000 400,000 2,800,000 Expected future net cash flows (discounted, value in use) 2,540,000 Fair value Costs to sell (costs of disposal) 2,480,000 20,000 Assume that Sweet Acacia will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Sweet Acacia uses the straight-line method of depreciation. Assume that Sweet Acacia is a private company that follows ASPE. (c) * Your answer is incorrect. The equipment's fair value at December 31, 2024, is $2.60 million. Prepare the journal entry, if any, to record the 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…The information that follows relates to equipment owned by Buffalo Limited at December 31, 2023: Cost Accumulated depreciation to date $4,320,000 480,000 Expected future net cash flows (undiscounted) 3,360,000 Expected future net cash flows (discounted, value in use) 3,048,000 Fair value 2,976,000 Costs to sell (costs of disposal) 24,000 Assume that Buffalo will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Buffalo uses the straight-line method of depreciation. Assume that Buffalo is a private company that follows ASPE. (a) (b) (c) The equipment's fair value at December 31, 2024, is $3.12 million. Prepare the journal entry, if any, to record the 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 O for the amounts. List debit entry before credit entry.) Date…The information that follows relates to equipment owned by Buffalo Limited at December 31, 2023: Cost Accumulated depreciation to date $4,320,000 480,000 Expected future net cash flows (undiscounted) 3,360,000 Expected future net cash flows (discounted, value in use) 3,048,000 Fair value 2,976,000 Costs to sell (costs of disposal) 24,000 Assume that Buffalo will continue to use this asset in the future. As at December 31, 2023, the equipment has a remaining useful life of four years. Buffalo uses the straight-line method of depreciation. Assume that Buffalo is a private company that follows ASPE. (a) (b) Prepare the journal entry to record depreciation expense for 2024. (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 31, 2024 Debit Cre
- Presented below is information related to equipment owned by Wildhorse Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,620,000 1,180,000 8,260,000 5,664,000 Assume that Wildhorse will continue to use this asset in the future. As of December 31, 2025, the equipment has a rerThe information regarding the fixed assets of Melcher Inc. as of December 31, 2020 is provided below: Expected future cash flows from the fixed assets Historical cost of fixed assets Accumulated depreciation on fixed assets Present value of expected future cash flows from fixed assets What is the amount of any impairment loss under US GAAP? O $0 $5,000 $7,000 $37,000 $80,000 $105,000 $30,000 $68,000The information that follows relates to equipment owned by Pearl Limited at December 31, 2020: Cost $9,810,000 Accumulated depreciation to date 1,090,000 Expected future net cash flows (undiscounted) 7,630,000 Expected future net cash flows (discounted, value in use) 6,921,500 Fair value 6,758,000 Costs to sell (costs of disposal) 54,500 At December 31, 2020, Pearl discontinues use of the equipment and intends to dispose of it in the coming year by selling it to a competitor. It is expected that the costs of disposal will total $54,500. Partially correct answer iconYour answer is partially correct. Assume that Pearl is a private company that follows ASPE. (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.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any.…
- Presented below is information related to equipment owned by Nash Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value (a) $6,270,000 Date Assume that Nash will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful life of 4 years and no salvage value. Your answer is partially correct. 750,000 December 4,810,000 3,320,000 Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Debit Credit EThe information that follows relates to equipment owned by Pearl Limited at December 31, 2017: Cost $7,560,000 Accumulated depreciation to date 840,000 Expected future net cash flows (undiscounted) 5,880,000 Expected future net cash flows (discounted, value in use) 5,334,000 Fair value 5,208,000 Costs to sell (costs of disposal) 42,000 Assume that Pearl will continue to use this asset in the future. As at December 31, 2017, the equipment has a remaining useful life of four years. Pearl uses the straight-line method of depreciation. Assume that Pearl is a private company that follows ASPE. 1. Prepare the journal entry at December 31, 2017, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2018. 3. The equipment’s fair value at December 31, 2018, is $5.46 million. Prepare the journal entry, if any, to record the increase in fair value. Repeat the requirements in (a) above assuming that Pearl…I need to know how to calculate the gain on the equipment sold in part C The balance sheets of HiROE Inc. showed the following at December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Equipment, less accumulated depreciation of $212,625 at December 31, 2020, and $151,875 at December 31, 2019. $ 273,375 $ 334,125 Required: If there have not been any purchases, sales, or other transactions affecting this equipment account since the equipment was first acquired, what is the amount of the depreciation expense for 2020? Assume the same facts as in part a, and assume that the estimated useful life of the equipment to HiROE Inc., is eight years and that there is no estimated salvage value. Determine: What the original cost of the equipment was. What depreciation method is apparently being used. When the equipment was acquired. Assume that this equipment account represents the cost of 5 identical machines. Prepare the horizontal model and record the journal…
- The information regarding the fixed assets of Broadwing Company as of December 31, 2019 is provided below: Expected future cash flows from the fixed assets Carrying value of fixed assets Present value of expected future cash flows from the fixed $80,000 $105,000 $68,000 $90,000 assets Selling price of fixed assets What is the amount of impairment loss under US GAAP? a. $10,000 b. $25,000 c. $23,000 d. $15,000Apex Communication purchased equipment on January 1, 2024, for $49,004 Suppose Apex Communication sold the equipment for $36,000 on December 31, 2025. Accumulated Depreciation as of December 31, 2025, was $15,078. Journalize the sale of the equipment, assuming straight-line depreciation was used First, calculate any gain or loss on the disposal of the equipment Market value of assets received Less Book value of asset disposed of Cost Less Accumulated Depreciation Gain or (Loss) 49004 36000Presented below is information related to Wolfie Corp.’s equipment on 12/31/2022: Description Amount Capitalized cost $900,000 Accumulated depreciation to date 750,000 Estimated residual value 40,000 Expected future cash flows 125,000 Estimated Fair value 100,000 The amount of the impairment loss, if any, that Wolfie Corp. should record on 12/31/22 is: $45,000 $50,000 $10,000 $20,000 $25,000 There is no impairment.