Impairment. Presented Below Is Information Related to Equipment Owned by Porto

question 153

Essay

Impairment.
Presented below is information related to equipment owned by Porto Company at December 31, 2014. Assume that Porto will continue to use this asset in the future. As of December 31, 2014, the equipment has a remaining useful life of 4 years.

Instructions

(a) For Porto company, the recoverability test compares $______ to $______. As a result, the asset ______ the recoverability test, because ______ is/are less than ______ so a ______ on impairment is recorded in 2014.
(b) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014.
(c) Prepare the journal entry to record depreciation expense for 2015.
(d) The fair value of the equipment at December 31, 2015 is $4,100,000. Prepare the journal entry (if any) necessary to record this increase in fair value.

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Definitions:

Unikonts

A group of eukaryotic organisms that include amoebas, most animals, and fungi, characterized by a single emergent flagellum.

Evolutionary Significance

The impact or importance of evolutionary changes and adaptations in the history and development of species, populations, or genes.

Red Algae

A group of predominantly marine algae, known for their distinctive red coloration, contributing significantly to oceanic ecosystems.

Green Algae

Diverse group of photosynthetic organisms found primarily in aquatic environments, important for oxygen production and as a base in the food web.