Question

Exercise 11-16 Presented below is information related to equipment owned by Oriole Company at December 31, 2017. $11,070,000 Cost Accumulated depreciation to date 1,230,000 Expected future net cash flows 8,610,000 Fair value 5,904,000 Assume that Oriole will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Date Debit Credit Dec. 31 SHOW LIST OF ACCOUNTS LINK TO TЕXT

Answer 1

a
Loss on impairment	3936000
Accumulated depreciation-Equipment		3936000
Cost	11070000
Accumulated depreciation	1230000
Carrying Amount	9840000
Less Fair value	5904000
Plus: Cost of disposal	0
Loss on impairment	3936000
b
No entry	0
No entry		0
c
Accumulated depreciation-Equipment	369000
Recovery of loss on impairment		369000
Fair value	6273000
Less: Cost of disposal	0	6273000
Carrying Amount		5904000	=9840000-3936000
Recovery of impairment loss		369000