Question

In: Accounting

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $128,000. The equipment...

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $128,000. The equipment has a five-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2017, Hirsch compiled the following information related to this equipment:

Expected future cash flows from use of the equipment $ 109,300
Present value of expected future cash flows from use of the equipment 95,000
Fair value (selling price less costs to dispose) 90,910

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

1.Prepare journal entries for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

- Record the entry for the purchase of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per U.S. GAAP

- Record the entry for the purchase of equipment as per IFRS.

- Record the entry for the expense on depreciation of equipment as per IFRS.

- Record the entry for the loss on impairment of equipment as per IFRS.

- Record the entry for the loss on impairment of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per IFRS.

2. Prepare the entry(ies) that Hirsch would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS. Ignore the possibility of any additional impairment at the end of 2018.

- Record the entry for the loss on impairment of equipment due to conversion from U.S. GAAP to IFRS.

- Record the entry for the loss on impairment of equipment due to conversion from U.S. GAAP to IFRS.

- Record the entry for reversing additional depreciation already recognized due to conversion from U.S. GAAP to IFRS

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $124,300. The equipment...
Hirsch Company acquired equipment at the beginning of 2017 at a cost of $124,300. The equipment has a five-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2017, Hirsch compiled the following information related to this equipment:                    Expected future cash flows from use of the equipment    $    106,400       Present value of expected future cash flows from use of the equipment        90,700   ...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $34,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $660. a. What was the depreciation for the first year? b. Assuming the equipment was sold at the end of year 2 for $7,860, determine the gain or loss on the sale of the equipment.
Equipment was acquired at the beginning of the year at a cost of $38,500. The equipment...
Equipment was acquired at the beginning of the year at a cost of $38,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $750. a. What was the depreciation for the first year? $ b. Assuming the equipment was sold at the end of year 2 for $8,900, determine the gain or loss on the sale of the equipment. $  Loss Feedback Book value is the asset...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $29,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $570. a. What was the depreciation for the first year? $ b. Assuming the equipment was sold at the end of year 2 for $6,820, determine the gain or loss on the sale of the equipment. $ c. Journalize the...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of...
Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $575,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,745. a. What was the depreciation for the first year? Round your answer to the nearest cent. $ b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it...
Equipment was acquired at the beginning of the year at a cost of $75,720. The equipment...
Equipment was acquired at the beginning of the year at a cost of $75,720. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,920. Required: a. What was the depreciation expense for the first year? b. Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on sale of the equipment. c. Journalize the entry to record...
Equipment was acquired at the beginning of the year at a cost of $79,560. The equipment...
Equipment was acquired at the beginning of the year at a cost of $79,560. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,800. a. What was the depreciation expense for the first year? $ b. Assuming the equipment was sold at the end of the second year for $60,100, determine the gain or loss on sale of the equipment. $    c. Journalize the entry to...
Equipment was acquired at the beginning of the year at a cost of $40,000. The equipment...
Equipment was acquired at the beginning of the year at a cost of $40,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $780. a. What was the depreciation for the first year? b. Assuming the equipment was sold at the end of year 2 for $9,240, determine the gain or loss on the sale of the equipment. $fill in the blank c. Journalize the entry...
Equipment was acquired at the beginning of the year at a cost of $562,500. The equipment...
Equipment was acquired at the beginning of the year at a cost of $562,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $40,600. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the...
Equipment was acquired at the beginning of the year at a cost of $35,000. The equipment...
Equipment was acquired at the beginning of the year at a cost of $35,000. The equipment was depreciated using the A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.double-declining-balance method based on an estimated useful life of ten years and an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $680. a. What was the The systematic periodic...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT