Pallmall Company has a truck that was purchased in prior years for $60 000. At the end of 2014, there is $30 000 of accumulated depreciation. The value of the truck has been impaired, and its remaining value is now estimated at $18 000. When Pallmall adjusts for the loss of value, how much will the loss on impairment be?

Question

Quizplus · Accepted Answer

The loss on impairment is calculated as the difference between the book value of the asset and its impaired value. The book value is the purchase price minus accumulated depreciation: $60,000 - $30,000 = $30,000. The impaired value is $18,000. Therefore, the loss on impairment is $30,000 - $18,000 = $12,000.

Pallmall Company Has a Truck That Was Purchased in Prior