Prepare the journal entry if any to record the impairment

Assignment Help Financial Accounting
Reference no: EM132608702

Rhino Corporation is a manufacturer of automobile parts. Its capital assets include specialized equipment that is being used in the finishing stage of its manufacturing process.

  • The equipment was purchased in 2017 and is being depreciated using the units of production method.
  • By December 31, 2018, the book (carrying) value was $430,000 (after depreciation expense had been recorded).
  • However, at that time, Rhino became aware of new technology that would make the equipment obsolete within the next five years.
  • An appraisal puts the equipment's future undiscounted net cash flows at $390,000 and its fair value at $300,000. While considering its options for the eventual replacement, Rhino will continue using the equipment, but will change to straight-line depreciation for the remaining useful life of 5 years.

Instructions (show all calculations)

Assuming Rhino is a private Canadian corporation,

Question a) Prepare the journal entry, if any, to record the impairment loss at December 31, 2018.

Question b) Prepare the journal entries to record 2019 depreciation

Reference no: EM132608702


Write a Review


Financial Accounting Questions & Answers

  Create a cash flow statement using the indirect method

Selected financial information for the Adelphi Company for the fiscal years ended December. Create a cash flow statement using the indirect method

  Liquidity position-calculate the operating cash cycle

Hercules Wholesalers Ltd has been particularly concerned with its liquidity position in recent months. Explain why Hercules Wholesalers Ltd is concerned about its liquidity position. Calculate the operating cash cycle for Hercules Wholesalers Ltd.

  What is portfolio beta and what is expected return

If we invest ½ of our money in the first asset and ½ of our money in the second, what is our portfolio beta and what is its expected return?

  Calculate the value of each investment

Calculate the value of each investment based on the required rate of return. Which investment would you recommend and why? Research on the current trends and future prospects on each of the industries and include a summary

  Prepare a master budget for beta manufacturing

Prepare a Master Budget for Beta Manufacturing Ltd for each quarter (with a yearly total column) for the year ended 31 December 2012.

  Questions related to transaction analysis

Multiple choice questions related to transaction analysis and Choose the correct answer from the given option.

  What is the IRR of the new? drug

What is the IRR of the new? drug? XYZ Laboratories Ltd undertook an NPV analysis of a new therapeutic drug that it had recently developed.

  How much total revenue does geo medical laboratory need

Assuming a multiproduct situation, how many patients and how much total revenue does GEO Medical Laboratory need to break even in a month?

  What ending inventory assuming fifo would be

Dunbar sold 640 units of inventory during the month. Ending inventory assuming FIFO would be: (Do not round your intermediate calculations.)

  Acquisition and disposition of property plantthe research

acquisition and disposition of property plantthe research paper should not be more than pages including one page for

  What was its 2010 net income

If Soule Company had net income of $585,000 in 2011 and it experienced a 30% increase in net income over 2010, what was its 2010 net income?

  Benefit of variable costing for internal reporting purposes

A benefit of variable costing for internal reporting purposes is that it:

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