Question

Safety-First Company completed all of its October 31, 2014, adjustments in preparation for preparing its financial statements, which resulted in the following trial balance.
Account.....................Balance
Accounts payable .......................................................... $11,220
Accounts receivable.......................................................... 19,800
Accumulated depreciation, building.................................. 79,200
Accumulated depreciation, equipment............................... 37,400
Accumulated depreciation, furniture.................................. 20,900
Allowance for doubtful accounts............................................ 880
Building ............................................................................ 136,400
Cash..................................................................................... 11,000
Equipment............................................................................ 90,200
Expenses, including cost of goods sold............................. 761,200
Furniture.............................................................................. 50,600
Land................................................................................... 105,600
Merchandise inventory........................................................ 35,200
Note payable........................................................................ 85,800
Sales.................................................................................... 904,200
Tarifa Sharma, capital .......................................................... 62,480
Unearned revenues .................................................................. 7,920
Other information:
1. All accounts have normal balances.
2. $26,400 of the note payable balance is due by October 31, 2015.
The final task in the year-end process was to assess the assets for impairment, which resulted in the following schedule.
Asset.............Recoverable Value
Land ................................................................... $136,400
Building................................................................ 105,600
Equipment............................................................... 28,600
Furniture ................................................................ 15,400

Required
1. Prepare the entry (entries) to record any impairment losses at October 31, 2014. Assume the company recorded no impairment losses in previous years.
2. Prepare a classified balance sheet at October 31, 2014.

Analysis Component
What is the impact on the financial statements of an impairment loss?



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  • CreatedJanuary 08, 2015
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