After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $752,000, accumulated depreciation was $554,000, and its fair value (based on estimated future cash flows from selling the equipment) was $52,000.

Determine whether the equipment is impaired.
Prepare the journal entries to record the impairment in asset if any.
Record the entry to remove accumulated depreciation.
Record the impairment loss.

1. the printing equipment is Impaired

2. Journal

Impairement Loss $146,000 (debit)

Accumulated Impairement Loss $146,000 (credit)

3. Journal

Accumulated Depreciation $554,000 (debit)

Accumulated Impairement Loss $146,000 (debit)

Printing Equipment (credit) $700,000

Explanation:

Impairement Loss (IAS 36) happens when the Carrying Amount of an Asset Exceeds its Recoverable Amount.

Carrying Amount Calculation

Carrying Amount = Cost - Accumulated Depreciation

                            = $752,000 - $554,000

                            = $198,000

Recoverable Amount Determination

Recoverable amount of an asset is the Higher of :

Only the fair value is provided, hence Recoverable amount is $52,000

Analysis for Impairment loss

Carrying Amount $198,000 > Recoverable amount $52,000

Therefore the printing equipment is Impaired

Impairement Loss $146,000 (debit)

Accumulated Impairement Loss $146,000 (credit)

answer; i believe the answer is (facework);

i guess you could put raise the economic balance