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Presented below is information related to equipment owned by Finley Co. at 12/31/12.

cost $700000000
accumulated depreciation to date $800000
Expected future net cash flows $5000000
fair value $3400000

Assume the asset will continue to be used in the future and has 4 years useful life remaining.

a: prepare journal entry to record impairment at 12/31/12

b: prepare journal entry to record depreciation expense for 2013

c: the fair value of the equipment at 12/31/13 is $4100000; prepare the journal entry (if any) to record this increase in fair value.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M940978

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