W4 Team A Assignment

W4 Team A Assignment - Exercise 11-18 [a] Loss on...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exercise 11-18 [a] Loss on Impairment 270,000 Accumulated Depreciation-Equipment 270,000 Cost 900,000 Accumulated depreciati 400,000 Carrying amount 500,000 Fair value 230,000 Loss on impairment 270,000 [b] [c] [d] The gain or loss on the write-down can be reported in the other expenses and losses on the income statement. There is no journal entry required because the carrying amount for the equipment should not change in 2008 except for the depreciation taken in 2007. Therefore, Petro Garcia, Inc. cannot restore an impairment loss for an asset that is intended for use in the future. Management had to determine whether there was an impairment with a recoverability test. If the sum of the future cash flows is less than the carrying amount of the asset determined during the test, then it is an impairment and a loss is calculated. The impairment loss is the amount where the carrying amount exceed its fair value.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Problem 11-10 SHERYL CROW CORPORATION Fixed Asset and Depreciation Schedule
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

W4 Team A Assignment - Exercise 11-18 [a] Loss on...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online