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In a recent 10-K report, Speedy Delivery Service states it "is the world's largest package delivery company, a leader in the U.S. less- than-truckload industry, and the premier provider of global supply chain management solutions." The following note and data were reported: Note 1-Summary of Accounting Policies Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the year Accumulated depreciation on property sold Cash received on property sold $ 40,575 42,380 2,725 21,590 22,755 1,963 920 798 101 Required: 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year, if any. (Hint: Set up T-

In a recent 10-K report, Speedy Delivery Service states it "is the world's largest package delivery company, a leader in the U.S. less- than-truckload industry, and the premier provider of global supply chain management solutions." The following note and data were reported: Note 1-Summary of Accounting Policies Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the year Accumulated depreciation on property sold Cash received on property sold $ 40,575 42,380 2,725 21,590 22,755 1,963 920 798 101 Required: 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year, if any. (Hint: Set up T-

Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter16: Advanced Topics Concerning Complex Auditing Judgments
Section: Chapter Questions
Problem 57RSCQ
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Saved Help Sav In a recent 10-K report, Speedy Delivery Service states it “is the world's largest package delivery company, a leader in the U.S. less- than-truckload industry, and the premier provider of global supply chain management solutions." The following note and data were reported: Note 1-Summary of Accounting Policies Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the yearn Accumulated depreciation on property sold Cash received on property sold $ 40,575 42,380 2,725 21,590 22,755 1,963 920 798 101 Required: 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year, if any. (Hint: Set up T- < Prev 8 of 10 Next > 43°F arch
Transcribed Image Text:Saved Help Sav In a recent 10-K report, Speedy Delivery Service states it “is the world's largest package delivery company, a leader in the U.S. less- than-truckload industry, and the premier provider of global supply chain management solutions." The following note and data were reported: Note 1-Summary of Accounting Policies Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the yearn Accumulated depreciation on property sold Cash received on property sold $ 40,575 42,380 2,725 21,590 22,755 1,963 920 798 101 Required: 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year, if any. (Hint: Set up T- < Prev 8 of 10 Next > 43°F arch
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