5. During the end of the year, YGX Company presented the following information: Equipment Accumulated depreciation However, the equipment is found to be impaired due to obsolescence as well as physical damage. At year-end, the company has determined the following information related to the equipment: Undiscounted net cash inflows Fair value less cost of disposal Value in use or discounted net cash inflows a. 1,500,000 b. 2,000,000 9,000,000 3,500,000 What amount should be reported as impairment loss for the year? c. 500,000 d. 0 4,500,000 3,500,000 3,000,000

5. During the end of the year, YGX Company presented the following information: Equipment Accumulated depreciation However, the equipment is found to be impaired due to obsolescence as well as physical damage. At year-end, the company has determined the following information related to the equipment: Undiscounted net cash inflows Fair value less cost of disposal Value in use or discounted net cash inflows a. 1,500,000 b. 2,000,000 9,000,000 3,500,000 What amount should be reported as impairment loss for the year? c. 500,000 d. 0 4,500,000 3,500,000 3,000,000

Name: 5. During the end of the year, YGX Company presented the followinginf
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Description: 5. During the end of the year, YGX Company presented the followinginformation:EquipmentAccumulated depreciationHowever, the equipment is found to be impaired due to obsolescenceas well as physical damage. At year-end, the company has determinedthe f

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 6MCQ: Which of the following is not true about the MACRS depreciation system: A salvage value must be...

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Hhi. What is the answr/solution to this problem? Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $843,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $72,600. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $123,600. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value,End of Year 1 $fill in the blank d67bc401dff703b_1 $fill in the blank d67bc401dff703b_2 $fill in the blank d67bc401dff703b_3 2 $fill in the blank…
ABC Ltd conducted an impairment test of one of its cash generating units (CGU) at 30 June 20X0. The test determined that the recoverable amount of the entire CGU was $80,000. The carrying amounts of the assets of the entity at 30 June 20X0 were: Equipment (net of depreciation) Receivables Goodwill $63,000 15,000 22,000 Required Prepare the journal entry to account for the impairment of goodwill at 30 June 20X0.
At year – end Jade Company has an equipment with the following cost and accumulated depreciation; Equipment 9 000 000 Accumulated depreciation 3 000 000 Due to obsolescence and physical damage, the equipment is bound to be impaired. At year – end the entity has determined the following information related equipment; Fair value less cost of disposal 4 500 000 Value in Use or discounted net cash enclosed 4 000 000 What amount should be reported as impairment for the year?
6. At year-end, an entity had an equipment with cost of P9,000,000 and accumulated depreciation of P3,000,000. Due to obsolescence and physical damage, the equipment was found to be impaired. On same date, the entity determined that the equipment had a fair value less cost of disposal of P4,500,000, discounted net cash inflows of P4,000,000 and undiscounted net cash inflows of P5,000,000. What amount should be reported as impairment loss for the current year?
E8-16 Inferring Asset Age and Recording Accidental Loss on a Long-Lived Asset (Straight-Line Depreciation) On January 1, 2018, the records of Smita Corporation showed the following: Truck (estimated residual value, $3,000) Accumulated depreciation (straight line, two years) $18,000 6,000 On September 30, 2018, the delivery truck was a total loss as a result of an accident. As the truck was insured, the company collected $7,600 cash from the insurance company on October 5, 2018.
On December 31, 2021, after a slight mishap, Wreckless Transport Co. decides to evaluate its delivery truck for possible impairment. The company has the following information as of 12-31-2021: Equipment cost 65,000 Accumulated depreciation to date 20,000 Expected future net cash flows 10,000 Fair Value on 12-31-2021 8,000 Disposal costs 2,000 Fair value of equipment on 12-31-2022 15,000 Assume that the company will continue to use this asset in the future. As of December 31, 2021, the equipment has a remaining useful life of 4 years. INSTRUCTIONS: A Prepare the journal entry, if any, to record impairment at 12-31-2021 B Prepare the journal entry, if any, at December 31, 2022 to record the increase in fair value. C Prepare the journal entry on 12-31-2021 to record impairment assuming that the company intends to dispose of the truck rather than continue to use it. Show work to explain please.
Staton Corporation's balance sheet includes Equipment recorded at a cost of $110,000 and accumulated depreciation of 20,000. After performing its annual review for impairment, Staton determined the following: Asset value in use $69,000 Fair value less selling costs 67,000 Undiscounted cash flows... 89,000 a Assuming Staton uses the rational entity impairment model record the appropriate entries. b Assuming Staton uses the cost recovery model calculate the impairment if any.
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4. During December 20x3, Bubba Inc. determined that there had been a significant decrease in the value of its equipment used in its manufacturing process. At December 31, 20x3, Bubba compiled the information below. Original cost of the equipment Accumulated depreciation Present value of expected net future cash inflows 500,000 300,000 related to the continued use and eventual disposal of the equipment Fair value less costs of disposal of the equipment 175,000 125,000 What is the amount of impairment loss that should be reported on Bubba's income statement prepared for the year ended December 31, 20х3?
On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $206,400 and has accumulated depreciation of $185,760. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal? a.Equipment, credit, $206,400 b.Gain on Disposal of Asset, credit, $20,640 c.Accumulated Depreciation, debit, $206,400 d.Loss on Disposal of Asset, debit, $185,760
On December 31, 20x1, DEF Company reported the following information:Equipment 6,250,000Accumulated depreciation 2,187,500The equipment was measured using the cost model and depreciated on a straight line basis over a 10-yearperiod.On the same date, the management decided to change to basis of measuring the equipment from the costmodel to the revaluation model.The equipment had a fair value of ₱5,687,500 with remaining useful life of 5 years on December 31, 20x1. 1. What amount should be reported as revaluation surplus on December 31, 20x1?2. What is the depreciation of the equipment for 20x2?3. What amount should be reported as revaluation surplus on December 31, 20x2?
Simpson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000. How much is the amount of revaluation surplus when the asset is revalued?