MN.18. An asset (according to the historical cost model) with a carrying amount as at December 31, X0 of $120,000. This asset is depreciated on a straight-line basis and has a remaining useful life of 3 years. The asset is expected to generate a net cash flow of $30,000 per year for the next 3 years, after which it will be liquidated with a liquidation value of $10,000 with no additional disposal costs. Currently, this property is marketable for $60,000 and $5,000 respectively. Require: 1. Determine the asset's value in use at an estimated discount rate of 6%. 2. Calculate property loss and record related journal entries (if any).
MN.18. An asset (according to the historical cost model) with a carrying amount as at December 31, X0 of $120,000. This asset is depreciated on a straight-line basis and has a remaining useful life of 3 years. The asset is expected to generate a net cash flow of $30,000 per year for the next 3 years, after which it will be liquidated with a liquidation value of $10,000 with no additional disposal costs. Currently, this property is marketable for $60,000 and $5,000 respectively. Require: 1. Determine the asset's value in use at an estimated discount rate of 6%. 2. Calculate property loss and record related journal entries (if any).
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
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
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MN.18.
An asset (according to the historical cost model) with a carrying amount as at December 31, X0 of $120,000. This asset is
Require:
1. Determine the asset's value in use at an estimated discount rate of 6%.
2. Calculate property loss and record related
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