At the end of the annual reporting period, December 31, 2014, LTX had the accounting situation given below under consideration for adjusting entries. Give the appropriate adjusting entry. Assume straight-line amortization. If an adjusting entry is not needed, explain why.
Situation: LTX had a small (and old) plant that has been idle for two years. LTX has been unable to sell it for the asking price of $75,000. It originally cost $325,000 and the accumulated depreciation is $265,000. A recent independent appraisal of its current value (the land plus salvage value of the plant) was $35,000.$\begin{array} { | l | l | l | }
\hline \text { Impairment loss on idle plant } & 25,000 & \
\hline \text { Accumulated depreciation } & & 25,000 \
\hline
\end{array}$

Question

At the end of the annual reporting period, December 31, 2014, LTX had the accounting situation given below under consideration for adjusting entries. Give the appropriate adjusting entry. Assume straight-line amortization. If an adjusting entry is not needed, explain why.
Situation: LTX had a small (and old) plant that has been idle for two years. LTX has been unable to sell it for the asking price of $75,000. It originally cost $325,000 and the accumulated depreciation is $265,000. A recent independent appraisal of its current value (the land plus salvage value of the plant) was $35,000.$\begin{array} { | l | l | l | } 
\hline \text { Impairment loss on idle plant } & 25,000 & \
\hline \text { Accumulated depreciation } & & 25,000 \
\hline
\end{array}$

Quizplus · Accepted Answer

The Answer of At the end of the annual reporting period, December 31, 2014, LTX had the accounting situation given below under consideration for adjusting entries. Give the appropriate adjusting entry. Assume straight-line amortization. If an adjusting entry is not needed, explain why.
Situation: LTX had a small (and old) plant that has been idle for two years. LTX has been unable to sell it for the asking price of $75,000. It originally cost $325,000 and the accumulated depreciation is $265,000. A recent independent appraisal of its current value (the land plus salvage value of the plant) was $35,000.$\begin{array} { | l | l | l | } 
\hline \text { Impairment loss on idle plant } & 25,000 & \
\hline \text { Accumulated depreciation } & & 25,000 \
\hline
\end{array}$

At the End of the Annual Reporting Period, December 31