We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may...

 

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We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the year Accumulated depreciation on property sold Cash received on property sold Required: Dollars in Millions $ 54,644 59,766 6,510 28,016 29,310 2,490 1,388 1,196 130 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Presents wrote off as impaired during the year, if any. (Hint: Set up T- accounts.) We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the year Accumulated depreciation on property sold Cash received on property sold Required: Dollars in Millions $ 54,644 59,766 6,510 28,016 29,310 2,490 1,388 1,196 130 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Presents wrote off as impaired during the year, if any. (Hint: Set up T- accounts.)

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Journal entry for the disposal of property and equipment during the year Debit Accumulated Depreciat... View the full answer