Cherry Technology purchased equipment on January 4, 2015, for $250,000. The equipment had an estimated useful life

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Cherry Technology purchased equipment on January 4, 2015, for $250,000. The equipment had an estimated useful life of six years and a residual value of $10,000. The company has a December 31 year end and uses straight-line depreciation. On December 31, 2017, the company tests for impairment and determines that the equipment's recoverable amount is $100,000.

(a) Calculate the equipment's carrying amount at December 31, 2017 (after recording the annual depreciation).

(b) Record the impairment loss.

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Accounting Principles

ISBN: 978-1119048503

7th Canadian Edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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