Presented below is information related to equipment owned by Suarez Company at December 31, 2027. $9,000,000...

 

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Presented below is information related to equipment owned by Suarez Company at December 31, 2027. $9,000,000 Cost Accumulated depreciation to date Expected future net cash flows Fair value 1,000,000 7,000,000 4,800,000 Assume that Suarez will continue to use this asset in the future. As of December 31, 2027, the equipment has a remaining useful life of 4 years. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2027. (b) Prepare the journal entry to record depreciation expense for 2028. (c) The fair value of the equipment at December 31, 2028, is $5,100,000. Prepare the journal entry (if any) necessary to record this increase in fair value. Presented below is information related to equipment owned by Suarez Company at December 31, 2027. $9,000,000 Cost Accumulated depreciation to date Expected future net cash flows Fair value 1,000,000 7,000,000 4,800,000 Assume that Suarez will continue to use this asset in the future. As of December 31, 2027, the equipment has a remaining useful life of 4 years. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2027. (b) Prepare the journal entry to record depreciation expense for 2028. (c) The fair value of the equipment at December 31, 2028, is $5,100,000. Prepare the journal entry (if any) necessary to record this increase in fair value.

Answer rating: 100% (QA)

a Impairment Journal Entry If the fair value of an asset is lower than its book value it is ... View the full answer