EXTRA CREDIT: 4.6 points Presented below is information rela…
EXTRA CREDIT: 4.6 points Presented below is information related to equipment owned by Stark Company at December 31, 2020. Cost $12,500,000 Accumulated depreciation to date $ 1,340,000 Expected future net cash flows $ 8,700,000 Fair value $ 5,740,000 Assume that Stark will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Fill in the missing amounts and choose the correct option. For Stark 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 2020. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) Prepare the journal entry to record depreciation expense for 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.) The fair value of the equipment at December 31, 2021 is $5,540,000. Prepare the journal entry (if any) necessary to record this increase in fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)