Problem 4: (10 marks) VERSION 3 The information that follows relates to the assets of...
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Problem 4: (10 marks) VERSION 3 The information that follows relates to the assets of Canadian Company as at December 31, 2020 (their year-end). Canadian Company has the following asset that has been identified as needing to be tested for impairment. Equipment Cost $111,000 Accumulated depreciation $68,000 Undiscounted future cash flows $47,000 Discounted future cash flows (value in use) $32,000 Fair value $33,000 Costs to sell $2,200 Remaining useful life in years 5 Instructions: Assume Canadian Company follows IFRS: a) Provide any required entries at December 31, 2020 regarding impairment for the Equipment. Assume depreciation for 2020 has already been recorded. If no entry is required comment on why. Supporting rough work must be shown for part marks. Date Description Dr Cr Show rough work here: b) Assume the fair value of the equipment less disposal costs is $40,000 at the end of 2021. Provide any required journal entry to recover impairment at this date. If no entry is required comment on why. Show supporting rough work, if any, for part marks. Date Description Dr Cr Show rough work here:
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