Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?

Swifty Incorporated purchased equipment for $1913000 in 2020. Four years later accumulated depreciation on the equipment equals $510000. Improved technology on this type of equipment has impaired the value of the equipment. Swifty plans to continue to use the equipment despite there being new technology available. Future cash flow are estimated to be $1209000. The controller believes the current fair value of the equipment to be approximately $604500. What journal entry is needed by Swifty to record the impairment on the equipment?

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

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6RE

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