Presented below is information related to equipment owned by Monty Company at December 31, 2017.Cost $9,450,000Accumulated depreciation to date 1,050,000Expected future net cash flows 7,350,000Fair value 5,040,000Monty intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,000. As of December 31, 2017, the equipment has a remaining useful life of 4 years.     Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (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.)DateAccount Titles and ExplanationDebitCreditDec. 31         SHOW LIST OF ACCOUNTSLINK TO TEXT    Prepare the journal entry (if any) to record depreciation expense for 2018. (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.)Account Titles and ExplanationDebitCredit        SHOW LIST OF ACCOUNTSLINK TO TEXT    The asset was not sold by December 31, 2018. The fair value of the equipment on that date is $5,565,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $21,000. (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.)DateAccount Titles and ExplanationDebitCreditDec. 31        Please answer all parts of my questionClick if you would like to Show Work for this question:Open Show Work

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Asked Nov 25, 2019
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Presented below is information related to equipment owned by Monty Company at December 31, 2017.

Cost   $9,450,000
Accumulated depreciation to date   1,050,000
Expected future net cash flows   7,350,000
Fair value   5,040,000

Monty intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,000. As of December 31, 2017, the equipment has a remaining useful life of 4 years.
 
 
 
 
 
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (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.)

Date
Account Titles and Explanation
Debit
Credit
Dec. 31
 
 
 
 
 
 
 
 
 

SHOW LIST OF ACCOUNTS
LINK TO TEXT
 
 
 
 
Prepare the journal entry (if any) to record depreciation expense for 2018. (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.)

Account Titles and Explanation
Debit
Credit
 
 
 
 
 
 
 
 

SHOW LIST OF ACCOUNTS
LINK TO TEXT
 
 
 
 
The asset was not sold by December 31, 2018. The fair value of the equipment on that date is $5,565,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $21,000. (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.)

Date
Account Titles and Explanation
Debit
Credit
Dec. 31
 
 
 
 
 
 
 
 

Please answer all parts of my question

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Expert Answer

Step 1

Impairment of Assets:

Impairment of an asset refers to sudden decrease of the present value of economic benefits that it can generate due to damage, obsolescence etc. Impairment is recognized by reducing the book value of the assets on balance sheet and recording the impairment loss on income statement.

Step 2

1. Following are the preparation of journal entry to record the impairment of the assets at December 31, 2017.

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Post Ref Debit (S) Credit(S) Date Description December Loss on impairment (1) 3,381,000 31, 2017 Accumulated depreciation 3,381,000 (To record impairment of assets)

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Step 3

Working Note:

(1) Calculate the loss on impai...

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Particulars Amount (S) 9,450,000 1,050,000 8,400,000 5,040,000 3,360,000 21,000 3,381.000 Cost (a) Accumulated depreciation (b) Carrying value c= (a-b) Fair value (d) Loss before disposal (e = c-d) Cost of disposal (f) Loss on impairment (e + f)

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