Answer:
Explanation:
In this scenario, we compare the values between book value and the fair value of equipment, the difference would be the loss on impairment of the asset
In mathematically,
= Book value - fair value
where,
Book value = Equipment cost - accumulated depreciation
= $672,000 - $174,000
= $498,000
And, the fair value is $384,000
Now put these values to the above formula
So, the value would equal to
= $498,000 - $384,00
= $114,000
Now the journal entry would be
Loss on impairment A/c Dr $114,000
To Accumulated depreciation A/c $114,000
(Being the impairment loss is recorded)
Yes i do pay attention to the price on the stocks on the stock market, it benefits me to do so because it helps me keep track of my purchase:)
Answer:
Date Account title and explanation Debit Credit
March 1 Equity investment $32,000
($612,000/17%)*8% - $256,000)
Unrealized holding gain $32,000
(To adjust the value of equity investment)
Note: On 1 march, value of the investment value is increased which is unrealized based on 31 December fair value
I believe the answer is:
a. cost curves to shift upward
Answer: debit to Stock Investments for $55,080.
Explanation:
As this is an investment in another company, it will count as an asset which means that when it increases, the account will have to be debited. It will therefore be debited for $55,080 to show the investment.
Cash will decrease by the same amount which means that it will have to be credited because assets are credited when they decrease.
Dr Stock Investments $55,080
Cr Cash $55,080
