Answered

Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Discover a wealth of knowledge from professionals across various disciplines on our user-friendly Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

On December 31, 2021, management of Jines Construction committed to a plan for selling an office building and its related equipment. Both are available for immediate sale. The building has a book value of $800,000 and a fair value of $900,000. The equipment has a book value of $240,000 and a fair value of $200,000. Calculate the amount that each asset will be reported at in the balance sheet and the amount of any gain or loss that will be reported in the income statement for the year ended December 31, 2021. Management expects to sell both assets in 2022.

Sagot :

Answer: See explanation

Explanation:

The amount that each asset will be reported at in the balance sheet will be:

Balance sheet as on December 31, 2021:

Building = $800,000

Equipment = $200,000

Income statement for the year ended December 31, 2021:

Impairment of asset = ($40,000)

Note that since the equipment has a book value of $240,000 and a fair value of $200,000, there's a decrease in value of $40,000 which will also be the value of the impairment of asset.

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.