FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The information that follows relates to equipment owned by Bonita Limited at December 31, 2020:
Cost
Accumulated depreciation to date
Expected future net cash flows (undiscounted)
Expected future net cash flows (discounted, value in use)
Fair value
Costs to sell (costs of disposal)
$6,660,000
740,000
5,180,000
4,699,000
4,588,000
37,000
Assume that Bonita will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining
useful life of four years. Bonita uses the straight-line method of depreciation.
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Transcribed Image Text:The information that follows relates to equipment owned by Bonita Limited at December 31, 2020: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) Expected future net cash flows (discounted, value in use) Fair value Costs to sell (costs of disposal) $6,660,000 740,000 5,180,000 4,699,000 4,588,000 37,000 Assume that Bonita will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life of four years. Bonita uses the straight-line method of depreciation.
Repeat the requirements in (a) above assuming that Bonita is a public company that follows IFRS. (Credit account titles
are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts.)
Account Titles and Explanation
Loss on Impairment
Accumulated Impairment Losses - Equipment
Depreciation Expense
Accumulated Depreciation - Equipment
Accumulated Impairment Losses - Equipment
Recovery of Loss from Impairment
Debit
1221000
1174750
1221000
Credit
1221000
1174750
1221000
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Transcribed Image Text:Repeat the requirements in (a) above assuming that Bonita is a public company that follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Loss on Impairment Accumulated Impairment Losses - Equipment Depreciation Expense Accumulated Depreciation - Equipment Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment Debit 1221000 1174750 1221000 Credit 1221000 1174750 1221000
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