Question: Assume the same information as E11-18, except that Pujols intends to dispose of the equipment in the coming year. Instructions (a) Prepare the journal entry

Assume the same information as E11-18, except that Pujols intends to dispose of the equipment in the coming year.

Instructions

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2015.

(b) Prepare the journal entry (if any) to record depreciation expense for 2016.

(c) The asset was not sold by December 31, 2016. The fair value of the equipment on that date is

€5,100,000. Prepare the journal entry (if any) necessary to record this increase. It is expected that the cost of disposal is €20,000.

Data From E11-18

E11-18 (Impairment) Presented below is information related to equipment owned by Pujols

E11-18 (Impairment) Presented below is information related to equipment owned by Pujols Company at December 31, 2015. Cost Accumulated depreciation to date Value-in-use Fair value less cost of disposal 9,000,000 1,000,000 7,000,000 4,400,000 Assume that Pujols will continue to use this asset in the future. As of December 31, 2015, the equipment has a remaining useful life of 4 years.

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