Crane Company uses special plastic wrapping equipment in its shipping business. The equipment was purchased in January 2016 for $3,920,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, 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 $2,744,000 and that the fair value of the equipment is $2,352,00O. Crane intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Crane uses straight-line depreciation. (a) Your answer is partially correct. Prepare the journal entry (if any) to record the impairment at December 31, 2017. (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.)

Crane Company uses special plastic wrapping equipment in its shipping business. The equipment was purchased in January 2016 for $3,920,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, 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 $2,744,000 and that the fair value of the equipment is $2,352,00O. Crane intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Crane uses straight-line depreciation. (a) Your answer is partially correct. Prepare the journal entry (if any) to record the impairment at December 31, 2017. (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.)

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 84TA

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