Supreme Inc. has equipment with an original cost of $640,000, and accumulated depreciation of $240,000....
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Supreme Inc. has equipment with an original cost of $640,000, and accumulated depreciation of $240,000. Supreme is aware of a general market decline in the value of this equipment due to upgrades that are now available. Supreme estimates the total remaining future net cash inflows from operating the equipment to be $320,000. The fair value of the equipment is estimated to be $240,000 based on conditions in the local market. Prepare the entry, if any, that Supreme should make to record the decline in value.
Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
| Account Name | Dr. | Cr. |
|---|---|---|
| CashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained EarningsPrior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A | ||
| CashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained EarningsPrior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A |
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