Calculate the amount of any impairment loss

Assignment Help Accounting Basics
Reference no: EM133102461

Question - On January 1, 2020, Travis Company purchased machinery costing $3,000,000. The company uses straight-line depreciation assuming the machinery's useful life to be 10 years and its residual value to be $600,000.

At the end of 2023, the company felt that technological advances had caused an impairment of its machinery and that the remaining useful life of the machinery was only four years. The company estimates the machinery will generate net cash inflows of $400,000 over each of the next four years. The fair market value of the equipment at the end of 2023 is $1,141,992.

Required -

a Determine if an impairment loss has occurred. (Show all calculations).

b. Calculate the amount of any impairment loss to be recognized.

Reference no: EM133102461

Questions Cloud

How much is incremental profit : At break-even point a company sells 2,400 widgets. Its selling price is $8 per widget, variable cost is $5 per widget, How much is incremental profit
Record the transactions in the general journal : As of April 1, 2016, Kelly decided to move to rented quarters and to operate the business on a full-time basis. Record the transactions in the General Journal
Level of economic development of a nation : Determines the level of economic development of a nation: Demographic, technology
Brief oral presentation on the status : Every month, each employee in your department is expected to give a brief oral presentation on the status of his or her project. However, your department has re
Calculate the amount of any impairment loss : On January 1, 2020, Travis Company purchased machinery costing $3,000,000. Calculate the amount of any impairment loss
Digital culture and computational techniques : Understanding of the impact that digital culture and computational techniques had in architecture over the past 30 years
Prepare the necessary adjusting entries on december : Salaries for the year that had been earned by employees but not paid to them or recorded is $15,500. Prepare the necessary adjusting entries on December
High-performing organization : Can you discuss how diagnosis, treatment plan, and population are relate to a high-performing organization?
How would increased productivity actually decrease : 1. List & explain 2 factors you must consider for your company to be successful/continue being successful in the international market.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Identify several rules jason might introduce

Should we Dump the Open-Plan Office? Identify several rules Jason might introduce that would make the open-plan office more conducive to effective teamwork.

  The highest decision-making level of the city

Millar City uses a purchases basis inaccounting for supplies. Open encumbraces are considered constrained by the highest decision-making level of the city

  What is the economic obligations of the business

If the economic resources of a business amount to 560,000 pesos and its residual interest of the owner amounts to 160,000 pesos, what is the economic obligation

  Determine the contribution margin per machine hour

Edgerron Company is able to produce two products, G and B, with the same machine in its factory. Determine the contribution margin per machine hour

  What are your costs for january and february

You're a used car dealer. On January 1st, you bought 10 used cars for $5,000 each. What are your costs for January and February

  Which loan would be the better choice

If the loan is to be repaid after 20 years, which loan would be the better choice (which loan has the lower cost of borrowing)

  What would be a good estimate for the balance

After all the bills are received at the end of September, what would be a good estimate for the balance in the accrual account

  How should the operating loss carryforward be disclosed

Prepare the lower portion of Keene's 2011 income statement, How should the operating loss carryforward be disclosed

  Preparing a statement of financial position

Question - Preparing a statement of financial position and calculating profit. Calculate each partner's share of profit for the year ended 31 December 2020

  Identify the proper point to recognize expense

Question - EXPENSE MATCHING - Identify the proper point to recognize expense for each of the following transactions

  Calculate the amount of the impairment

Discuss the major differences between impairment rules for proved properties and unproved properties for successful efforts companies.

  How much of the distribution is treated as a dividend

Lion distributed $300,000 to its sole shareholder on December 31, 20X3. How much of the distribution is treated as a dividend in 20X3

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd