FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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1. The company purchased the equipment on October 1, 20X1 for $100,000, and estimated that the equipment will use for 5 years and has a residual value of $2,000. The equipment has the following capacity: 10,000 service hours. December 31 is the reporting date. The equipment provided 600 and 2,200 service hours in 20X1 and 20X2, respectively.
Required
Calculate
Straight-line
Double-declining-balance
Activity method
For 20X1, 20X2
2. The company provided the data of PP&E in a cash-generating unit (CGU) as follows:
Cost Acmulated Depreciation
Equipmnt A $15,000 $8,000
Equipment B $30,000 $19,000
Equipment C $45,000 $23,000
The unit’s fair value less costs to sell was $25,000. The unit’s future
Required
(1) Prepare
(2) If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment.
(3) If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.
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