Fellalova Corporation has recently abandoned an industrial

 
Expert Answer
default_image Yvonne
Date:   9 d ago

default_image El
Date:   12 d ago
Date/Sr NO
Particulars
Debit
Credit
1
Impairment Loss
300000




To Land


300000








2
Land 
1500000




To Cleaning Exp


1500000








3
Land 
700000




To Impairment Loss


700000

The Above Journal Entry Recorded all the Adjustment Transaction

default_image ALLAN
Date:   11 d ago

a. The journal entry to record the impairment is as follows:

Land impairment:

Debit: Land

Credit: Accumulated impairment

Building impairment:

Debit: Building

Credit: Accumulated impairment

b. Fellalova should report the following information in its financial statements and notes:

-The land and buildings have been abandoned and are currently being assessed for their fair value.

-The land is currently valued at $200,000, but will require cleaning at an estimated cost of $1,500,000 prior to sale.

-The building is currently valued at $800,000.

-It is estimated that it will take eight months to clean the land.

-The estimated cost to sell the land and building (after cleaning the land) is $180,000 plus 5% of the sales price.