Presented below is information related to equipment owned by Suarez Company at D

ID: 2474443 • Letter: P

Question

Presented below is information related to equipment owned by Suarez Company at December 31, 2014.

Assume that Suarez will continue to use this asset in the future. As of December 31, 2014, the equipment has a remaining useful life of 5 years.

1. Prepare the Journal entry (if any) to record the impairment of the asset at December 31,2014

2. Prepare the journal Entry to record the depreciation expense for 2015

Cost $ 13,986,000 Accumulated depreciation to date 1,554,000 Expected future net cash flows 10,878,000 Fair value 7,459,200

Loss in impairment = 13,896,000 - 1,554,000 - 7,459,200 = 4,882,800

(1) Loss on Impairment.......Dr 4,882,800

To, Accumulated Depreciation 4,882,800