Question 4 17 Marks 1 The Company Purchased The Equipment On October 1 20x1 For 100 000 And Estimated That The Equ 1 (108.92 KiB) Viewed 28 times
Question 4 (17 marks) 1. The company purchased the equipment on October 1, 20X1 for $100,000, and estimated that the equipment will use for 5 years and has a residual value of $2,000. The equipment has the following capacity: 10,000 service hours. December 31 is the reporting date. The equipment provided 600 and 2,200 service hours in 20X1 and 20X2, respectively. Required (6 marks): Calculate depreciation expense for 20X1 and 20X2 using different methods in the following table 10 Straight-line Double-declining- balance Activity method 20X1 20X2 P# The company provided the data of PP&E in a cash-generating unit (CGU) as follows: Cost Accumulated Depreciation PP&E-A $ 15,000 $ 8,000 PP&E-B 30,000 19,000 PP&E-C 45,000 23,000
The unit's fair value less costs to sell was $25,000. The unit's future cash flows was $32,000, and its present value was $28,000. The company adopted IFRS. Required (11 marks): (1) Prepare journal entries to record impairment. (2) If the recoverable amount of PP&E-C is $19,000, prepare journal entries to record impairment. (3) If the recoverable amount of PP&E-C is $24,000, prepare journal entries to record impairment.
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