E Computing and Assessing Plant Asset Impairment
Zeibart Company purchased equipment for $ on July with an estimated useful life of years and expected salvage value of $ Straightline depreciation is used. On July economic factors cause the fair value of the equipment to decline to $ On this date, Zeibart examines the equipment for impairment and estimates $ in future cash inflows related to use of this equipment.
a Is the equipment impaired at July Explain.
b If the equipment is impaired on July compute the impairment loss and prepare a journal entry to record the loss.
c What amount of depreciation expense would Zeibart record for the months from July through June Prepare a journal entry to record this depreciation expense. Hint: Assume no change in salvage value.
E Computing and Assessing Plant Asset Impairment FSET
Using the information from E show how the entries in parts and affect Zeibart Company's balance sheet and income statement by using the financial statement effects template.
