Prepare the journal entry to record depreciation expense

Assignment Help Accounting Basics

Reference no: EM13484186

Presented below is information related to equipment owned by Pujols Company at December 31, 2012.

Cost		$9,000,000
Accumulated depreciation to date		1,000,000
Expected future net cash flows		7,000,000
Fair value		4,400,000

Assume that Pujols will continue to use this asset in the future. As of December 31, 2012, the equipment has a remaining useful life of 4 years.
(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2012. (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.)

(b) Prepare the journal entry to record depreciation expense for 2013 using straight-line method. (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) The fair value of the equipment at December 31, 2013, is $5,100,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (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.)

Reference no: EM13484186

Questions Cloud

How much should a sterling bond cost today if it promises : suppose that a0 100 and a1 105 dollars the present price of pound sterling is s0 1.6 dollars and the forward price

How should an insurance company incorporate insurance : how should an insurance company incorporate insurance contract acquisition costs in the fair value

How should an insurance company identify potential exit : how should an insurance company identify potential exit markets for insurance contracts and for embedded derivatives in

How should investment companies account for transaction : how should investment companies account for transaction costs under fas

Prepare the journal entry to record depreciation expense : presented below is information related to equipment owned by pujols company at december 31 2012.cost9000000accumulated

How should private equity funds consider third-party : how should private equity funds consider third-party transactions in measuring fair

Will the fair value of a plain-vanilla interest rate swap : will the fair value of a plain-vanilla interest rate swap on variable rate debt be affected by statement

Let a0 100 a1 112 and s0 34 dollars is it possible to : let a0 100 a1 112 and s0 34 dollars. is it possible to find an arbitrage opportunity if the forward price of stock

Suppose the companys actual capital structure is 50 percent : piedmont instruments corporation has estimated the following costs of debt and equity capital for various fractions of

User Account

All Pages