E8-35. Computing and Assessing Plant Asset ImpairmentZeibart Company purchases equipment for $225,000 on July 1, 2016, with an estimated useful lifeof 10 years and expected salvage value of $25,000. Straight-line depreciation is used. On July 1,2020, economic factors cause the fair value of the equipment to decline to $90,000. On this date,Zeibart examines the equipment for impairment and estimates $125,000 in future cash inflowsrelated to use of this equipment.Is the equipment impaired at July 1, 2020? Explain.If the equipment is impaired on July 1, 2020, compute the impairment loss and prepare a jour-nal entry to record the loss.What amount of depreciation expense would Zeibart record for the 12 months from July 1,2020 through June 30, 2021? Prepare a journal entry to record this depreciation expense.(Hint: Assume no change in salvage value.)d. Using the financial statement effects template, show how the entries in parts b and c affectZeibart Company's balance sheet and income statement.а.b.C.

related to use of this equipment. a. Is the equipment impaired at July 1, 2020? Explain. b. If the equipment is impaired on July 1, 2020, compute the impairment loss and prepare a jour- nal entry to record the loss.

related to use of this equipment. a. Is the equipment impaired at July 1, 2020? Explain. b. If the equipment is impaired on July 1, 2020, compute the impairment loss and prepare a jour- nal entry to record the loss.

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 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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