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Dolphin Company uses special strapping equipment in its packaging business. The equipment was purchased in...

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Accounting

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Dolphin Company uses special strapping equipment in its packaging business. The equipment was purchased in january 2024 for 56,000,000 and hod an estimated useful ilfe of 8 years with no salvage value. At December 31, 2025, new technology was introduced that would accelerate the obsolescence of Dolphin's equipment. Dolphin's controller estimates that expected future net cash flows on the equipment wil be $3,750,000 and that the fair value of the equipment is $3,300,000. Doliphin intends to continue using the equipment, but is is estimated that the remaining useful life is 4 years. Dolphin uses straight-line depreciation. Instructions (a) What is the carryeng value of the equipment at December 31, 2025? (b) Prepare the journal entry (if any) to record the impairment at December 31, 2025. (c) Prepare any journal entries for the equipment at December 31, 2026. The fair value of the equipment at December 31, 2026, is estimated to be $3,450,000. (d) Repeat the requirements for (a) and (b), assuming that Doiphin intends to dispose of the equipment and that it has not been disposed of as of December 31,2026

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