A company owns machinery with a book value of P2,200,000. It is estimated that the machinery will generate future cash flows of P1,995,000. The machinery has a fair value of P1,915,000. The journal entry to record the impairment loss will reduce income from continuing operations by P205,000. include a P285,000 credit to the asset account. record an extraordinary loss of P80,000. increase the asset's Accumulated Depreciation account by P285,000.

A company owns machinery with a book value of P2,200,000. It is estimated that the machinery will generate future cash flows of P1,995,000. The machinery has a fair value of P1,915,000. The journal entry to record the impairment loss will reduce income from continuing operations by P205,000. include a P285,000 credit to the asset account. record an extraordinary loss of P80,000. increase the asset's Accumulated Depreciation account by P285,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...

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Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business depreciates a building with a book value of $12,000, using straight-line depreciation, no salvage value, and a remaining useful life of six years. B. An organization has a line of credit with a supplier. The company purchases $35,500 worth of inventory on credit. Terms of purchase are 3/20, n/60. C. An employee earns $1,000 in pay and the employer withholds $46 for federal income tax. D. A customer pays $4,000 in advance for legal services. The lawyer has previously recognized 30% of the services as revenue. The remainder is outstanding.
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