Exercise 11 18 lhe management of petro Garcia Inc. was discussing whether cert a

Question

Exercise 11 18 lhe management of petro Garcia Inc. was discussing whether cert an equipment should be written off as a charge to current operations because of obsintence. This equipm ent has a cost of sooo ooo . depreciation to date of $400,000 as of December 31, 2017. On December 31, 2017, management projected its future net cash flows from this equipment to be $300,000 and its fair value to be $230,000. The company intends to use this equipment in the future Your answer is correct Prepare the journal entry (if any) to record the impairment at December 31, 2017 F no eatry is required, select "No entry for the account titles and enter o for the amounts. Credit account titles are automatically indented when aount is entered. Do not indent manually Date Account Tiles and Esglonation Credit Dec. 31 Loss on mparment ] Your answer is partially correct. Try again. At December 31, 2018, the equipment's fair value increased to $260,000. Prepare the journal entry (if any) to record this increase in fair value. (If mo entry is required, select "No entry" far the account Date Account titles and Explanation Dec. 31 No En to search 114/2017

Explanation / Answer

1 Dec-31-17 Loss on impairment 270000 (900000-400000)-230000         Accumulated depreciation 270000 2 Dec-31-18 No entry 0         No entry 0

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