a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020.   b) Prepare the journal entry to record depreciation expense for 2021.

Q: On December 31, 2019, the statement of financial position of Twitter Corporation showed the…

A: Revaluation Surplus: A revaluation excess is a kind of equity account in which any increases in the…

Q: Presented below is information related to equipment owned by Vaughn Company at December 31, 2020.…

A: Recoverable Amount is higher of the following :  Fair value less cost of disposal = $5,520,000…

Q: At December 31, 2020, the following existed on the records of DRA Co.:  Fixed Assets: $86,000…

A: In this case of DRA co., the year ended art September 30, 2021 and during the year total fixed asset…

Q: At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization…

A: 1. Prepare a schedule analyzing the changes in each of the plant asset accounts during 2021.

Q: Presented below is information related to equipment owned by Suarez Company at December 31, 2020.…

A:

Q: Sunland Company purchased a new plant asset on April 1, 2020, at a cost of $750,000. It was…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: Presented below is information related to equipment owned by Davis Company at December 31, 2020.…

A: Impairment of Assets:Impairment of an asset refers to sudden decrease of the present value of…

Q: Presented below is information related to equipment owned by Davis Company at December 31, 2020.Cost…

A: (a) Required journal entry: Working note:

Q: The December 31, 2020 balance sheet of Swifty Company showed Equipment of $75,000 and Accumulated…

A: Depreciable cost = Original cost - Accumulated depreciation - Salvage value

Q: Assume that Carleton reported the following information regarding a machine at December 31, 2019:…

A: Impairment refers to the situation when an asset of the company falls short in its fair market value…

Q: On December 31, 2019, the statement of financial position of Twitter Corporation showed the…

A: Revaluation on equipment = fair value of equipment - carrying value of equipment = P900,000 -…

Q: Company H acquired an equipment on June 1, 2020 amounting to $35,000 with an estimated useful life…

A: Cost of Equipment on 1st June 2020 = $35000 Residual value at the end of the 5th year = $5000 Time…

Q: The following data pertains to the equipment on July 1,2021, the date of revaluation Cost…

A: Equipment will be valued at lower of carrying amount or recoverable amount .  Here recoverable…

Q: On May 1, 2019 equipment worth $40,000 was purchased with cash.  Assuming straight-line method of…

A: Depreciation refers to reduction in value of an asset over a period of time due to usage of asset in…

Q: The following data relate to the acquisition of an equipment owned by GRACE Corporation.…

A: Solution:- Calculation  of the the depreciation expense for the year 2023 using sum of the years…

Q: Presented below is information related to equipment owned by Coronado Company at December 31, 2020.…

A: Recovery of impairment loss = Fair value on December 31, 2021 - Fair value on December 31, 2020 =…

Q: Presented below is information related to equipment owned by Davis Company at December 31, 2020.…

A: Impairment of asset is done when carrying value of asset is higher than it's recoverable value. This…

Q: Presented below is information related to equipment owned by Sunland Company at December 31, 2020.…

A: Net book value after impairment on Dec 31, 2020 = Book value - accumulated depreciation - impairment…

Q: On July 1, 2019, Cullumber Company purchased new equipment for $85,000. Its estimated useful life…

A:

Q: Presented below is information related to equipment owned by Metlock Company at December 31, 2020.…

A:

Q: An equipment costing P375,000 with an eight-year estimated useful life and an estimated residual…

A: Life of equipment = 8 Years Sum of years digits = 8+7+6+5+4+3+2+1 = 36 Cost = P375,000 Salvage value…

Q: Great Value Company purchased equipment on January 1, 2020, for $75,000, with an estimated useful…

A: Given, Jan 1 2020 Purchase price = $75000 Life = 7 years Residual value = $ 5000 Sold @ July 1 2022

Q: At December 31, 2020, the following existed in the in the records of Lauren Company: Fixed assets –…

A: Depreciation represents the estimated fall in the value of the historical cost due to the normal…

Q: Presented below is information related to equipment owned by Swifty Company at December 31, 2020.…

A: Impairment cost is reduced carrying value of an asset as compared to declined fair value.

Q: Land Bank of the Phil. bought an office equipment for P750,000 on Nov. 25, 2020. The equipment’s…

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: M&M Inc. was preparing the annual financial statements and, as part of its year-end procedures,…

A: Impairment loss arises when recoverable amount is less than the carrying amount Statement showing…

Q: Presented below is information related to equipment owned by Pujols Company at December 31, 2020.…

A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…

Q: Presented below is information related to equipment owned by Sunland Company at December 31, 2020.…

A: Date Account titles and explanation Debit Credit Dec.31 Loss on impairment $3,616,000…

Q: Presented below is information related to equipment owned by Sheridan Company at December 31, 2020.…

A: Working Note; Carrying value = Cost - Accumulated Depreciation                         = $9,630,000…

Q: The following data relate to the acquisition of an equipment owned by ACE Corporation. Acquisition…

A: Because an asset is likely to experience wear and tear over time, depreciation must be provided.…

Q: On April 1, 2020, an entity purchased machinery for P3,300,000. The machinery has an estimated…

A: Fixed assets that are used in a business will undergo certain wear and tear due to continuous…

Q: Presented below is information related to equipment owned by Vaughn Company at December 31, 2020.…

A: Impairment loss = Carrying value - Recoverable value where, Recoverable value = Lower of Fair value…

Q: Presented below is information related to a copyright owned by Mare Company at December 31, 2020.…

A:

Q: Presented below is information related to equipment owned by Vaughn Company at December 31, 2020.…

A: There is no entry required to record the increase in fair value.

Q: On December 31, 2020, the statement of financial position of ABC Company showed the following…

A: Deprecition is diminition in the value of an asset on account…

Q: Presented below is information related to equipment owned by Sunland Company at December 31, 2020.…

A: Fair value of the asset = $5424000 Estimated future cash flows = $7910000 Recoverable value of the…

Q: What amount should be reported as impairment loss on December 31, 2019? What is the carrying amount…

A: Given information is: On December 31, 2019, an entity has a machinery with the following cost and…

Q: Presented below is information related to copyrights owned by Taylor Corporation atDecember 31,…

A: Determine the amount of loss on impairment of the asset.

Q: Presented below is information related to equipment owned by Sunland Company at December 31, 2020.…

A: Recovery of impairment loss = Fair value on December 31, 2021 - Fair value on December 31, 2020 =…

Q: Presented below is information related to equipment owned by Suarez Company at December 31, 2020.…

A: Calculation of impairment loss recorded in 2020 and carrying amount on Dec 31, 2020: Depreciation…

Q: Presented below is information related to equipment owned by Vaughn Company at December 31, 2020.…

A: Recoverable value = Lower of Fair value and Estimated undiscounted sum of future cash flows…

Q: On June 30, 2020, Happy Corporation reported the following information: Equipment at cost…

A: On June 30 2020   Cost  30000000 Accumulated Depreciation 10500000     On Dec 31 2020…

Q: Presented below is information related to equipment owned by Blossom Company at December 31, 2017.…

A: Fair value $2,688,000   Life / 4   Depreciation Expenses $672,000

Q: 8,540,000 Fair value   5,856,0

A: Journal Entries: are the first recording of any transaction in the books of accounts. These entries…

Q: Presented below is information related to equipment owned by Swifty Company at December 31, 2020.…

A: Cost 9,270,000   Less: Accumulated depreciation -1,030,000   Carrying Amount 8,240,000…

Q: On December 31, 2020, Tritt Inc. has a machine with a book value of $940,000. The original cost and…

A: Journal entry: Journal entry is a set of economic events that can be measured in monetary terms.…

Q: Presented below is information related to equipment owned by Monty Company at December 31, 2017.…

A: Impairment of Assets:Impairment of an asset refers to sudden decrease of the present value of…

Q: depreciation is taken in the year of acquisition. • No depreciation is taken in the year of…

A: Depreciation under straight line method is:   = (Original cost  - Residual value) ÷ Useful life

Q: Presented below is information related to equipment owned by Swifty Company at December 31, 2020.…

A: Particulars Amount Cost $9,270,000 Less: Accumulated depreciation 1,030,000 Carrying Amount…

Q: Presented below is information related to equipment owned by Porto Company at December 31, 2017.…

A: Impairment loss = Carrying value of assets - Recoverable value of assets Recoverable value = Lower…

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.