As of December 31, 2022, Soles, S.A. owns a machine for the manufacture of the products it sells, which has the following conditions: machine A has an acquisition price of $2,450,000.00 MXN, an accumulated depreciation of $700,000.00 MXN and a useful life of 7 years. This machine was acquired on January 1, 2020. The aforementioned machine is pending depreciation as of December 31, 2022 and the company is aware that it has suffered a significant impairment in value. For the calculation of the mentioned impairment the company has the following values: Fair value less cost to sell $1,350,000 Value in use $1,375,000 The following year, the machine recovers part of its value. The values to be used to perform the impairment test are as follows: Fair value less cost of sales $1,050,000 Value in use $1,040,000

a. How should "Soles" record the loss and subsequent recovery of the value of its machine and the depreciation entries for the years 2022 and 2023?

Answer rating: 100% (QA)

To record the loss and subsequent recovery of the value of the machine owned by Soles SA and the dep... View the full answer