Reference no: EM13912386
Computing and Assessing Plant Asset Impairment
On January 1, Zeibart Company purchases equipment for $220,000. The equipment has an estimated useful life of 10 years and expected salvage value of $25,000. The company uses straight-line depreciation. Four years later, economic factors cause the fair value of the equipment to decline to $85,000. On this date, Zeibart examines the equipment for impairment and estimates undiscounted expected cash inflows from this equipment of $115,000
(a) Compute the annual depreciation expense relating to this equipment.
(b) Compute the equipment's net book value at the end of the fourth year.
(c) Apply the test of impairment to this equipment as of the end of the fourth year. Is the equipment impaired?
Yes, because the fair value is less than the net book value.
Yes, because the net book value is greater than the salvage value.
Yes, because the undiscounted expected cash flows are less than net book value.
No, because the net book value minus the salvage value is greater than the undiscounted expected cash flows.
No, because the net book value minus the salvage value is less than the undiscounted expected cash flows.
(d) If the equipment is impaired at the end of the fourth year, compute the impairment loss. (If the equipment is not impaired, enter 0.
|
Why is mirage formed
: Why is mirage formed? A. equal heating of different parts of the atmosphere B. magnetic disturbances in the atmosphere
|
|
Elaborate wedding cakes
: Gabby's Wedding Cakes creates elaborate wedding cakes
|
|
Calculate the change in the loader
: A 15,000 kg loader traveling east at 20 km/h turns south and travels at 25 km/h. Calculate the change in the loader's
|
|
Annual revenue from pottery sales
: He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000-2 points
|
|
Plant asset impairment
: Computing and Assessing Plant Asset Impairment.On January 1, Zeibart Company purchases equipment for $220,000. The equipment has an estimated useful life of 10 years and expected salvage value of $25,000. The company uses straight-line depreciation. ..
|
|
Prepare the journal entry to record pension expense
: Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2010.
|
|
Depreciation methods
: depreciation methods is most appropriate to measure the decline in the usefulness of the company's assets
|
|
How is depreciation expense recorded
: how is depreciation expense recorded on the statement of cash flows
|
|
Bidding scheme
: Write a report to the manager identifying a possible cause of this situation develop an alternative bidding scheme to overcome this problem ,support your analysis with a comparison of the suggested and existing scheme
|