Madison Company purchased a machine on February 1, 2018, for $200,000. On December 31, 2021, when the book value of the machine is $90,000, Madison Company checks to see if the machine is impaired. Due to recent technological advances Madison Company expects the machine to generate future cash flows of $70,000. If Madison Company estimates the current fair market value of the machine is $55,000 on December 31, 2021, what amount of impairment loss (if any) should be recorded?
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- Dexter Inc. acquired a machine on January 1, 2010 for $520,000. The machine had an expected life of 20 years and salvage value of $40,000. Dexter uses straight line depreciation. On July 1, 2020, the company reviewed the machine for impairment and determined that its undiscounted future net cash flows totaled $200,000 and its discounted future net cash flows totaled $154,000. If no active market exists for the machine and the company plans to continue operating it, what should Dexter record as an impairment loss on July 1, 2020? Compute the carrying value of the machine on July 1, 2020. Is the machine impaired? Explain the basis of your conclusion. Include numbers. Compute the amount of impairment loss recorded on July 1, 2020 (if any). Compute the carrying value of the machine on December 31, 2020, assuming no change in its service life and salvage value.Waterway Industries bought a machine on January 1, 2011 for $802000. The machine had an expected life of 20 years and was expected to have a salvage value of $84000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $397000 and its fair value was $305000. If the company does not plan to dispose of it, what should Waterway record as an impairment loss on July 1, 2021? Correct Answer $120050. Please show work thank youCrane Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $10,100,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Crane's equipment. Crane's controller estimates that expected future net cash flows on the equipment will be $6,363,000 and that the fair value of the equipment is $5.656,000. Crane intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Crane uses straight-line depreciation.
- Splish Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $12,400,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Splish's equipment. Splish's controller estimates that expected future net cash flows on the equipment will be $7,812,000 and that the fair value of the equipment is $6,944,000. Splish intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Splish uses straight-line depreciation. (a) (c) Prepare the journal entry (if any) to record the impairment at December 31, 2020. (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) Date Account Titles and Explanation Dec. 31 (b) Textbook and Media Date Account Titles and…At the end of 2020, Bonita Company is conducting an impairment test and needs to develop a fair value estimate for machinery used in its manufacturing operations. Given the nature of Bonita's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Bonita's accountants have developed the following cash flow information for the equipment. Year 2021 2022 2022 Net Cash Flow Estimate $5,440 9,500 $(460) 2,180 3,800 Scrap value $530 970 Probability Assessment 40% Click here to view factor tables 60% 20% 60% 20% 50% 50% Using expected cash flow and present value techniques, determine the fair value of the machinery at the end of 2020. Use a 6% discount rate. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Sair Fair value of the machinery at the end of 2020 $Roland Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $10,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Roland’s equipment. Roland’s controller estimates that expected future net cash flows on the equipment will be $6,300,000 and that the fair value of the equipment is $5,600,000. Roland intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Roland uses straight-line depreciation. Instructions a. Prepare the journal entry (if any) to record the impairment at December 31, 2020. b. Prepare any journal entries for the equipment at December 31, 2021. The fair value of the equipment at December 31, 2021, is estimated to be $5,900,000. c. Repeat the requirements for (a) and (b), assuming that Roland intends to dispose of the equipment and that it…
- Susan Co. has a machine that cost $810,000 on March 20, 2017. This old machine had an estimated life of ten years and a salvage value of $30,000. On December 23, 2021, the old machine is exchanged for a new machine with a fair value of $522,000. The exchange lacked commercial substance. Susan also received $58,000 cash. Assume that the last fiscal period ended on December 31, 2020, and that straight-line depreciation is used. Show the calculation of the amount of gain or loss to be recognized by Susan Co. from the exchange.Concord Corporation bought a machine on January 1, 2011 for $807000. The machine had an expected life of 20 years and was expected to have a salvage value of $77000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $403000 and its fair value was $298000. If the company does not plan to dispose of it, what should Concord record as an impairment loss on July 1, 2021? a. $20750 b. $0 c. $28000 d. $125750On January 1, 2016, the Key West Company acquired a pie-making machine for $50,000. The machine was expected to have a useful life of 10 years with no residual value. Key West uses the straight-line depreciation method. On January 1, 2023, due to technological changes in the bakery industry, Key West believed that the asset might be impaired. Key West estimates the machine will generate net cash flows of $12,000 and has a current fair value of $5,040. Required: 1. What is the book value of the machine on January 1, 2023?$fill in the blank 66999d0af058066_1 2. Compute the loss related to the impairment.$fill in the blank 66999d0af058066_2 3. Prepare the journal entry necessary to record the impairment of the machine. If an amount box does not require an entry, leave it blank. Jan. 1 fill in the blank 83327604a043063_2 fill in the blank 83327604a043063_3 fill in the blank 83327604a043063_5 fill in the blank 83327604a043063_6
- On January 1, 2020 Hill Bowling purchased equipment for $3.5 million. The equipment is being depreciated by the straight-line method over 10 years with no residual value. On December 31, 2024, new advanced bowling equipment has come on the market. As a result, Hill believes the bowling equipment currently being used is going to become obsolete quicker than anticipated, so Hill wants to complete an impairment test on that equipment. Hill estimates that the net cash flows from using the current equipment will be $250,000 per year for the next five years. Hill also expects it could sell the current equipment immediately for $25,000. Hill uses a 14% discounted rate to evaluate other projects of this nature. Required:Complete the Impairment test for Hill Bowling. PV of $1 .519 PV of an annuity of $1 3.433 FV of $1 1.925 FV of an annuity of $1 6.610 Hill BowlingImpairment TestDecember 31, 2024 Equipment cost $fill in the blank 1 Less: Accumulated depreciation fill in the…Evan Company purchased a machine for $1,400,000 on January 1, 2019. Evan estimates the machine will have a ten-year useful life and a salvage value of $200,000. Evan uses a straight-line depreciation method. On December 31, 2022, economic conditions suggested that Evan’s machine had become impaired. Evan estimates that expected future cash flows from using the equipment will be $360,000 and the fair value of the machine is $250,000. Evan intends to use the machine for two more years (2023 and 2024). Prepare the entry (if any) Evan should make on 12-31-22 for impairment. Prepare any entry (entries) Evan should make on 12-31-23 relating to using the machine.Sheridan Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2024 for $10,700,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Sheridan's equipment. Sheridan's controller estimates that expected future net cash flows on the equipment will be $6,741,000 and that the fair value of the equipment is $5,992,000. Sheridan intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Sheridan uses straight-line depreciation. Prepare the journal entry (if any) to record the impairment 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.) Date Dec. 31 Account Titles and Explanation…