California Spas Recently Learned That the Value of Its Building

question 245

Multiple Choice

California Spas recently learned that the value of its building required a write-down because of the discovery that it was on an earthquake fault line.The book value of the building was $1,570,000 before the discovery and the fair value was $975,000 after the discovery.Which of the following is the journal entry used to record the asset impairment?

• A) Debit Impairment Loss and credit Accumulated Depreciation for $595,000
• B) Debit Depreciation Expense and credit Building for $595,000
• C) Debit Impairment Loss and credit Building for $595,000
• D) Debit Other Gains and Losses and credit Accumulated Depreciation for $595,000

---

Definitions:

Digital Messages

Electronic messages that are transmitted over a network, including emails, text messages, and instant messages.

Planning

The process of making detailed arrangements or preparations for future activities or events.

Writing

The process of using symbols (letters of the alphabet, punctuation, and spaces) to communicate thoughts and ideas in a readable form.

Completing

The act of finishing a task or project, bringing it to a conclusion or fulfillment.