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Homework answers / question archive / Presented below is information related to equipment owned by Bramble Company at December 31, 2020
Presented below is information related to equipment owned by Bramble Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $10,260,000 1,140,000 7,980,000 5,472,000 Bramble intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,800. As of December 31, 2020, the equipment has a remaining useful life of 5 years.
(a) ? Your answer is correct. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter O 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 Loss on Impairment 3,670,800 Accumulated Depreciation-Equipment 3,670,800
(b) Your answer is partially correct. Prepare the journal entry (if any) to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Depreciation Expense 1094400 Accumulated Depreciation Equipment 1094400
| (a) | Date | Account Titles and Explanation | Debit | Credit |
| Dec 31, 2020 | Loss on Impairment | 3,670,800 | ||
| Accumulated Depreciation—Equipment | 3,670,800 | |||
| Working | ||||
| Cost | 10,260,000 | |||
| Accumulated depreciation | 1,140,000 | |||
| Carrying amount | 9,120,000 | |||
| Recoverable amount (5,472,000 - 22,800) | 5,449,200 | |||
| Loss on impairment | 3,670,800 | |||
| (b) | Date | General Journal | Debit | Credit |
| Dec 31, 2021 | No Entry Required | |||
