How do you Calculate Part A and C? How do you do the JE for Part C ?Exercise 11-

Question

How do you Calculate Part A and C? How do you do the JE for Part C ?Exercise 11-17 (Part Level Submission) A. Presented below is information related to equipment owned by Bonita Company at December 31, 2017. Cost $10,980,000 Accumulated depreciation to date 1,220,000 Expected future net cash flows 8,540,000 Fair value 5,856,000 Bonita intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $24,400. As of December 31, 2017, the equipment has a remaining useful life of 5 years. (a) Your answer is partially correct. Try again. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.

(c)Your answer is partially correct. Try again. The asset was not sold by December 31, 2018. The fair value of the equipment on that date is $6,466,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $24,400. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Book value of equipment = 10980000-1220000= 9760000 a Loss on impairment 3928400 =9760000-(5856000-24400)          Accumulated depreciation-Equipment 3928400 c Accumulated depreciation-Equipment 610000 =6466000-5856000           Recovery of loss on Impairment 610000

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