Food Inc., a public company, has a machine that processes and package.docx - Food Inc a public company has a machine that processes and packages tuna

Food Inc., a public company, has a machine that processes and package.docx

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Food Inc., a public company, has a machine that processes and packages tuna in oil. This machine cannot be used for any other purpose. The machine originally cost $111.000 and is being amortized on a straight-line basis over 20 years. The carrying amount of the machine on 31 December 20X2 is $36.500 Recent health studies have shown that due to contamination, eating tuna is bad for your health Undiscounted cash flows for the machine are $33.000. Discounted cash flows for the machine are $28,000. The machine is unique therefore, fair value cannot be determined. Required: 1-a. Is the machine impaired? 1-bProvide the journal entry there is impairment of no entry is required for a
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Unformatted text preview: transaction event, select "No journal entry required in the first account field.) Journal entry worksheet 2-a. Al the beginning of the following year new evidence comes out rebutting the evidence that tuna is bad for your health in fact studies have shown it is very healthy to eat fish. The company has also been able to package the tuna in water instead of oil. Can any previous impairment be reversed? 2-b. yes, provide the journal entry. If no entry is required for a transaction event, select "No journal entry required in the first account field) Journal entry worksheet...
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  • Spring '17
  • DEBORAHGOLDSMITH

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