[vodrldnr]

what is J/E and Accounting treatment for Idle machines ???

my question is from this problem

52. When preparing a draft of its 2005 balance sheet, Mont, Inc. reported net assets totaling $875,000. Included in the asset section of the balance sheet were the following:
Treasury stock of Mont, Inc. at cost, which approximates market value on December 31 $24,000
Idle machinery 11,200
Cash surrender value of life insurance on corporate executives 13,700
Allowance for decline in market value of noncurrent equity investments 8,400

At what amount should Mont’s net assets be reported in the December 31, 2005 balance sheet?
A. $851,000
B. $850,100
C. $842,600
D. $834,500

Where idle machine sit in BS???

It ain't About How Hard You Hit

[Anonymous]

Idle machinery falls under the category of “property, plant and equipment” or “fixed assets”. Even though it is idle, it still has to be depreciated. If the asset still looks “like-new” after fully depreciated, there might be buyers that would pay FMV according to the current shape of the machinery rather than the age, so that a gain is recognized to offset for over-depreciating something that have not been fully utilized.

[vodrldnr]

@Loo, wow so clear! actually I was looking for the reason why Idle machine is still considered asset! thank you so much !!!!

It ain't About How Hard You Hit

[Author]

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