13.The demand for one of X Company's products has declined in recent years. The product is manufactured using designated equipment thatoriginally cost $1,300,000 and has a carrying value of $720,000. As of the current date, December 31, 2018, it is expected that only an additional400,000 units are likely to be sold over the remaining life of the equipment. Each unit sells for $3 and has a manufacturing cost of $1.50. Relevantinformation as of December 31, 2018:. The undiscounted future cash inflows from the sale of products over the life of the equipment is expected to be $600.000.. The present value of the future cash inflows from the sale of products over the life of the equipment, calculated at the company's cost ofcapital, Is $475,000.. The equipment has a fair value of $490,000 on the date of evaluation.How much of an impairment loss will X Company recognize in 2018?O $230,000O soO $120,000$245,000

Lets understand the basics.When undiscounted cashflow arising from the equipment is less than the…

Answered: The demand for one of X Company's…

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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