Tamkang Company, purchased a piece of equipment for $3,000,000 at the beginning of 20X1, with an estimated
Question:
Tamkang Company, purchased a piece of equipment for $3,000,000 at the beginning of 20X1, with an estimated service life of 8 years and a residual value of $200,000, Tamkang. The company adopts the multiple declining balance method for depreciation. At the end of 20X1, the products manufactured by this equipment were affected by the Sino-US trade war, and there were.
Indication of impairment of export restrictions, Tamkang estimates the recoverable amount to be $2,000,000. At the end of 20X2, due to signs of impairment and recovery, The company estimated the recoverable amount of the equipment at $1,700,000.
1. Assuming the estimated service life and residual value remain unchanged, please make relevant entries for the depreciation and impairment of the equipment in 20X1 and 20X2
2. In order to save the industries hit by the Sino-US trade war, the government provides cash relief assistance.
The government issued a 3 million yuan bailout, on the condition that no salary reduction for existing employees is allowed for 2 years from the date of receiving the subsidy. The Tamkang company will be closed by the end of 20X2
If the regulations are met, please make relevant entries for the 20X2 government subsidies for Tamkang Company.
Financial Management Theory And Practice
ISBN: 978-0176583057
3rd Canadian Edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason