Presented below is information related to equipment owned by Bramble Company at December 31, 2025.CostAccumulated depreciation to date.Expected future net cash flowsFair value$10,260,000(a)1.140,0007,980,0005,472,000Assume that Bramble will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful lifeof 5 years.Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (If no entry is required, select"No entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented whenamount is entered. Do not indent manually. List debit entry before credit entry.)ternunt Titles and FynlanationDebitCreditSUPPORT

Name: Presented below is information related to equipment owned by Bramble
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Description: Presented below is information related to equipment owned by Bramble Company at December 31, 2025.CostAccumulated depreciation to date.Expected future net cash flowsFair value$10,260,000(a)1.140,0007,980,0005,472,000Assume that Bramble will continue

Impairment refers to a significant, permanent reduction in the recoverable amount of an asset below…

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Presented below is information related to equipment owned by Bramble Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,260,000 1.140,000 7,980,000 5,472,000 Assume that Bramble will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful life of 5 years (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (If no entry is required, select. "No entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Debit Credit SUPPORT

Presented below is information related to equipment owned by Bramble Company at December 31, 2025. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,260,000 1.140,000 7,980,000 5,472,000 Assume that Bramble will continue to use this asset in the future. As of December 31, 2025, the equipment has a remaining useful life of 5 years (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2025. (If no entry is required, select. "No entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Debit Credit SUPPORT

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 32BE: Depreciation Methods On January 1, 2019, Loeffler Company acquired a machine at a cost of $200,000....

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On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
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