Question - Inferring Asset Impairment and Recording Disposal of an Asset In a recent 10-K report, United Parcel Service states it "is the world's largest package delivery company, a leader in the U.S. less-than-truckload industry, and the premier provider of global supply chain management solutions."
Cost of property and equipment (beginning of year) $39,151
Cost of property and equipment (end of year) 40,620
Capital expenditures during the year 2,328
Accumulated depreciation (beginning of year) 21,190
Accumulated depreciation (end of year) 22,339
Depreciation expense during the year 1,923
Cost of property and equipment sold during the year 840
Accumulated depreciation on property sold 774
Cash received on property sold 53
1. Reconstruct the journal entry for the disposal of property and equipment during the year.
2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year. (Hint: Set up T-accounts.)