22.ImpairmentBrown Industries has two machines that it believes may be impaired. Information on the machines is shown below. Book ValueEstimated FutureCash FlowsFair ValueMachine 1$42,000 $50,000 $40,000 Machine 250,000 40,000 32,000 Required:For each machine, determine if the machine is impaired. If so, calculate the amount of the impairment loss. (If a machine is not impaired, enter 0 as your answer.) Enter your answers as positive values.

Impairment loss is the difference between book value of asset less amount recoverable from the…

Answered: Impairment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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22.

Impairment

Brown Industries has two machines that it believes may be impaired. Information on the machines is shown below.

	Book Value	Estimated Future Cash Flows	Fair Value
Machine 1	$42,000		$50,000	$40,000
Machine 2	50,000		40,000	32,000

Required:

For each machine, determine if the machine is impaired. If so, calculate the amount of the impairment loss. (If a machine is not impaired, enter 0 as your answer.) Enter your answers as positive values.

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