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On January 4, 20X1, Ludwig Inc. purchased a machine for $58,000. The equipment's residual value was estimated to be $4,000 at the end of its six-year economic life. On August 31, 20X3, Ludwig put up the machine for sale and actively tried to find a buyer. At its year end December 31, 20X3. the machine has not been sold. Ludwig estimated that the undiscounted future cash flows of the machine is $38,000, and the machine's fair value less cost to sell is $33, 000. How much is the sum of 20X3 depreciation expense and impairment loss, if any?

On January 4, 20X1, Ludwig Inc. purchased a machine for $58,000. The equipment's residual value was estimated to be $4,000 at the end of its six-year economic life. On August 31, 20X3, Ludwig put up the machine for sale and actively tried to find a buyer. At its year end December 31, 20X3. the machine has not been sold. Ludwig estimated that the undiscounted future cash flows of the machine is $38,000, and the machine's fair value less cost to sell is $33, 000. How much is the sum of 20X3 depreciation expense and impairment loss, if any?

FINANCIAL ACCOUNTING
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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On January 4, 20X1, Ludwig Inc. purchased a machine for $58,000. The equipment's residual value was estimated to be $4,000 at the end of its six-year economic life. On August 31, 20X3, Ludwig put up the machine for sale and actively tried to find a buyer. At its year end December 31, 20X3. the machine has not been sold. Ludwig estimated that the undiscounted future cash flows of the machine is $38,000, and the machine's fair value less cost to sell is $33,000. How much is the sum of 20X3 depreciation expense and impairment loss, if any?
Transcribed Image Text:On January 4, 20X1, Ludwig Inc. purchased a machine for $58,000. The equipment's residual value was estimated to be $4,000 at the end of its six-year economic life. On August 31, 20X3, Ludwig put up the machine for sale and actively tried to find a buyer. At its year end December 31, 20X3. the machine has not been sold. Ludwig estimated that the undiscounted future cash flows of the machine is $38,000, and the machine's fair value less cost to sell is $33,000. How much is the sum of 20X3 depreciation expense and impairment loss, if any?
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