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Safari File Edit View History Bookmarks Window Help newconnect.mheducation.com ep Google Apple netflix Wikipedia youtube rdirecta Facebook footbie Yelp directvnow zeekgps pearson utep Air Jordan, Nike, adidas, Supre Air Jordan 1 Hi Retro "Think 1 Connect Ch. 11 Assessment Saved Help Save & Exit Submit 81 Fryer Inc. owns equipment for which it paid $90 million. At the end of 2018, it had accumulated depreciation on the equipment of $27 million. Due to adverse economic conditions, Fryer's management determined that it should assess whether an impairment loss should be recognized for the equipment. The estimated undiscounted future cash flows to be provided by the equipment total $60 million, and the equipment's fair value at 4200that point is $40 million. Under these circumstances, Fryer: eBook Multiple Choice None of these answer choices are correct. Would record a $23 million impairment loss on the equipment. Would record no impairment loss on the equipment. Would record a $3 million impairment loss on the equipment Mc Graw Hill 30

Explanation / Answer

B. Fryers Would record a $ 23 million impairment loss on the equipment.

Working note: equipment - accumulated depreciation = carting value,

90-27= 63

The recoverable amount is the value in use (cash flow generated) or fair market value( amount for which the item could be sold) Whichever is higher.

63-40= 23

Impairment loss= 23

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