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Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?

Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?
Transcribed Image Text:Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?
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