Waterway Industries bought a machine on January 1, 2011 for $802000. The machine had an expected life of 20 years and was expected to have a salvage value of $84000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $397000 and its fair value was $305000. If the company does not plan to dispose of it, what should Waterway record as an impairment loss on July 1, 2021? Correct Answer $120050. Please show work thank you

Waterway Industries bought a machine on January 1, 2011 for $802000. The machine had an expected life of 20 years and was expected to have a salvage value of $84000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $397000 and its fair value was $305000. If the company does not plan to dispose of it, what should Waterway record as an impairment loss on July 1, 2021? Correct Answer $120050. Please show work thank you

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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Question

Waterway Industries bought a machine on January 1, 2011 for $802000. The
machine had an expected life of 20 years and was expected to have a salvage
value of $84000. On July 1, 2021, the company reviewed the potential of the
machine and determined that its future net cash flows totaled $397000 and its fair
value was $305000. If the company does not plan to dispose of it, what should
Waterway record as an impairment loss on July 1, 2021?
Correct Answer $120050. Please show work thank you

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