Account Titles and Explanation Debit Credit Account Titles a

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

Presented below is information related to equipment owned by Sweet Company at December 31, 2017. Cost $9,900,000 Accumulated depreciation to date 1,100,000 Expected future net cash flows 7,700,000 Fair value 5,280,000 Assume that Sweet will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 5 years.

Solution

a 31-Dec Loss on Impairment 3520000 =(9900000-1100000)-5280000          Accumulated Depreciation—Equipment 3520000 b 31-Dec Depreciation Expense 1056000 =5280000/5          Accumulated Depreciation—Equipment 1056000 c 31-Dec No entry necessary