Om itthesigninyourresponse generalj ournal accum

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Unformatted text preview: ing of y ear) Ac c umulated deprec iation (end of y ear) Deprec iation ex pens e during the y ear Cos t of property and equipment s old during the y ear Ac c umulated deprec iation on property s old Cas h rec eiv ed on property s old Dollars in millions $ 33,625 35,094 2,644 15,958 16,834 1,807 1,033 931 159 Required: 1. Rec ons truc t the journal entry for the dis pos al of property and equipment during the y ear. (Enter your answers in m illions. Om it the "$" sign in your response.) General J ournal Accum ulated depreciation Debit 931 Cash Gain on sale of property and equipm ent Property and equipm ent 159 Credit 57 1,033 2. Compute the amount of property and equipment that United Parc el wrote off as impaired during the y ear. (Hint: Set up T­ac c ounts .) (Enter your answer in m illions. Input the am ount as positive value. Om it the "$" sign in your response.) Impairment los s $ 142 Worksheet Learning Objective: 08­04 Explain the effect of asset impairment on the financial statements. E8­12 Inferring Asset Impairment and Recording Disposal of an Asset LO4, 5 Learning Objective: 08­05 Analyze the disposal of property, plant, and equipment. E8-12 Inferring Asset Impairment and Recording Disposal of an Asset LO4, 5 In a rec ent 10­K report, United Parc el Serv ic e s tates it "is the world's larges t pac k age deliv ery c ompany , a leader in the U.S. les s ­than­truc k load indus try , and a global leader in s upply c hain management." The following note and data were reported: Note 1—Sum m ary of Accounting Policies Im pairm ent of Long­Lived Assets . . . we rev iew long­liv ed as s ets for impairment when c irc ums tanc es indic ate the c arry ing amount of an as s et may not be rec ov erable bas ed on the undis c ounted future c as h flows of the as s et. . . . Cos t of property and equipment (beginning of y ear) Cos t of property and equipment (end of y ear) Capital ex penditures during the y ear Ac c umulated deprec iation (beginning of y ear) Ac c umulated deprec iation (end of y ear) Deprec iation ex pens e during the y ear Cos t of property and equipment s old during the y ear Ac c umulated deprec iation on property s old Cas h rec eiv ed on property s old Dollars in millions $ 33,625 35,094 2,644 15,958 16,834 1,807 1,033 931 159 Required: 1. Rec ons truc t the journal entry for the dis pos al of property and equipment during the y ear. (Enter your answers in m illions. Om it the "$" sign in your response.) General J ournal Cas h Ac c umulated deprec iation Property and equipment Gain on s ale of property and equipment Debit 159 ± 2% 931 ± 2% Credit 1,033 ± 2% 57 ± 2% 2. Compute the amount of property and equipment that United Parc el wrote off as impaired during the y ear. (Hint: Set up T­ac c ounts .) (Enter your answer in m illions. Input the am ount as positive value. Om it the "$" sign in your response.) Impairment los s $ 142 ± 2% Explanation: 1. Property , Plant, and Equipment Beg. Bal. 33,625 Capital ex penditures End. Bal. 2,644 1,033 Property s old 142 Write­offs 35,094 Ac c umulated Deprec iation Property s old 931 15,958 Beg. Bal. 1,807 Deprec iation ex pens e 16,834 End. Bal. 2. Amount of property and equipment written off as impaired during the y ear: Beginning balanc e + Capital ex penditures during y ear − Cos t of property s old during y ear − Impairment los s during y ear Ending balanc e $ 33,625 2,644 ( 1,033) (142) $ 35,094...
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