During 2010,a Company Paid $1,200,000 to Acquire a Roller Coaster

question 225

Essay

During 2010,a company paid $1,200,000 to acquire a roller coaster.The estimated useful life of the roller coaster was estimated at ten years and its residual value was expected to be $200,000.As of December 31,2015,Accumulated Depreciation in the amount of $500,000 had been recorded on the roller coaster.Management estimates that other amusement parks and scrap dealers would currently pay $600,000 for the roller coaster.
Required:
Part a.Determine the asset impairment loss,if any,on the roller coaster at December 31,2015.
Part b.Prepare the journal entry to record the asset impairment loss on this roller coaster as of December 31,2015.

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Definitions:

Sales Growth Rate

A measure of the increase in sales over a specific period, usually expressed as a percentage.

Financial Statements

Structured reports detailing the financial activities and condition of a business, including balance sheet, income statement, and cash flow statement.

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to increase financial leverage or equity financing.

Financial Ratios

Quantitative measures used to assess various aspects of a company's financial health and performance.