Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. eckland manufacturing co. purchased equipment on j

Eckland Manufacturing Co. purchased equipment on January 1, 2009, at a cost of $90,000. Depreciation...

90.2K

Verified Solution

Question

Accounting

Eckland Manufacturing Co. purchased equipment on January 1, 2009, at a cost of $90,000. Depreciation for 2009 and 2010 was based on an estimated ten-year life, $2,000 estimated residual value and Double decline balance depreciation method. On January 1, 2011, Eckland revised its estimate and now believes the equipment will have a remaining service life of eight years, $2,500 estimated residual value and sum-of-years digits (SYD) depreciation method .

On Dec 31 2011, Eckland reasonably estimated future cash flow that annual net cash inflow of previous three years will have $ 7,000 and remaining years will have $5,000. Also Eckland estimated the residual value $1,000.

  • Additional information: Discount rate 6%, PV(3,6%)=0.84, PV(6,6%)=0.70,PV(7,6%)=0.66 PVA(3,6%)=2.67, PVA(4,6%)=3.47

Required:

Determine the amount of impairment loss, if any. If a loss is indicated, prepare the entry to record the loss under IFRS and USGAAP.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Medical Sciences
1.2K views

Provide one or two sentence descriptions to indicate the key functions of the following hematopoietic and lymphoid...

Civil Engineering
1.2K views

What contribution might the weather data file make to the performance gap?

Biology
1.2K views

1)Compare Eukaryotic and Prokaryotic Cells.

Advance Math
1.2K views

write a procedure that implements the Pollard rho factorization method in Mathematica.

Accounting
1.2K views

What is the opinion or perspective on this? Please raise thoughtful questions, analyze relevant issues, build...

Physics
1.2K views

5 A rectangular loop carrying current i is shown in the diagram If the magnetic...

Accounting
1.2K views

A company's flexible budget for 14,000 units of production showed per unit contribution margin of...

Accounting
1.2K views

[The following information applies to the questions displayed below.] As part of a major renovation...

Accounting
1.2K views

Martha has a net capital loss of $20,000 and other ordinary taxable income of $45,000...

Accounting
1.2K views

The Baldwin Company has just purchased $40,900,000 of plant and equipment that has an estimated...

Accounting
1.2K views

The area of designated reservoir is 100 acres, and the thickness of the sandstone and...

Accounting
1.2K views

Commercial paper is usually used to finance overseas trade. True or False