1 During 2015, XYZ Enterprises sold a piece of machinery, which originally cost

Question

1 During 2015, XYZ Enterprises sold a piece of machinery, which originally cost $40,000, for $12,000. This sale resulted in a gain of $2,000. Also during 2015, XYZ’s Accumulated Depreciation account (for all fixed assets) increased from $200,000 to $210,000. How much did XYZ report as Depreciation Expense for 2015 (for all fixed assets)? There were no fixed asset impairments during 2015.

2 At the end of the fourth quarter (Q4), XYZ had $80,000 in accounts receivable outstanding. However, based on past experience, it only expected to collect $72,000 in cash from those receivables. XYZ began Q4 with an allowance for doubtful accounts balance of $7,000 and during the quarter wrote off $2,000 in accounts that it determined to be uncollectable. How much Bad Debt Expense should XYZ report in its Q4 income statement? (just enter numbers--no symbols like $ or ,)

3 At the end of its 2015 fiscal year, a triggering event caused XYZ Enterprises to perform an impairment test for one of its indefinite-lived intangible assets. The following information is available for the asset as of Dec. 31, 2015:

Original cost                                                    $56 million

Estimated undiscounted future cash flows $60 million

Fair value (discounted future cash flows) $50 million

Based on this information, XYZ should record:

Explanation / Answer

1./

DEPRICIATION EXPENSES FOR ALL FIXED ASSET THE YEAR 2015 IS ($210000 - $200000) = $10000

2./

BAD DEBT EXPENSES FOR THE 4TH QUARTER IS $2000 WHICH IT DETERMINNED TO BE UNCOLLECTIABLE.

3./

ORIGINAL COST OF ASSET = $56 MILLION

LESS FAIR VALUE OF THE AASET = ($50 MILLION)

IMPAIRMENT = $6 MILLION

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