Zeibart Company purchases equipment for $235,000 on July 1, 2012, with an estimated useful life of...

 

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Zeibart Company purchases equipment for $235,000 on July 1, 2012, with an estimated useful life of 10 years and expected salvage value of $28,000. Straight- line depreciation is used. On July 1, 2016, economic factors cause the market value of the equipment to decline to $97,500. On this date, Zeibart examines the equipment for impairment and estimates $127,500 in future cash inflows related to use of this equipment. d. Using the financial statement effects template, show how the entries in parts b and caffect Zeibart Company's balance sheet and income statement. Income Statement Balance Sheet: + Contrib. Capital + Earned Capital + Noncash Assets (54,700) -$ Transaction Cash Asset Contra Assets- Liabilities Revenue Expenses Net Income b. Impairment charge c. Depreciation expense Ov + $ 0 x = S 0 x - Zeibart Company purchases equipment for $235,000 on July 1, 2012, with an estimated useful life of 10 years and expected salvage value of $28,000. Straight- line depreciation is used. On July 1, 2016, economic factors cause the market value of the equipment to decline to $97,500. On this date, Zeibart examines the equipment for impairment and estimates $127,500 in future cash inflows related to use of this equipment. d. Using the financial statement effects template, show how the entries in parts b and caffect Zeibart Company's balance sheet and income statement. Income Statement Balance Sheet: + Contrib. Capital + Earned Capital + Noncash Assets (54,700) -$ Transaction Cash Asset Contra Assets- Liabilities Revenue Expenses Net Income b. Impairment charge c. Depreciation expense Ov + $ 0 x = S 0 x -

Answer rating: 100% (QA)

Straight line Depreciation 23500028000 10 20700 Boo... View the full answer