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Prepare the journal entry necessary to record the increase

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Presented below is information related to equipment owned by Cullumber Company at December 31, 2017.

Cost$9,720,000

Accumulated depreciation to date 1,080,000

Expected future net cash flows 7,560,000

Fair value 5,184,000

Cullumber intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $21,600. As of December 31, 2017, the equipment has a remaining useful life of 5 years.

Question 1: The asset was not sold by December 31, 2018. The fair value of the equipment on that date is $5,724,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $21,600.

Reference no: EM132572619

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