Impairment Basil Corporation's balance sheet includes the following asset: Equipment: $100,000 Accumulated depreciation: 20,000 Basil was notified of a significant change in demand for the product produced by the machine, and decided to test for impairment. Basil obtained the following data: Future cash flows (undiscounted): $78,000 Value in use (discounted): 73,000 Fair value: 75,000 Selling costs: 3,000 Required: Assuming Basil Corporation follows ASPE, calculate if the asset is impaired, and prepare any journal entry required. Show your calculations.
Impairment
Basil Corporation's balance sheet includes the following asset:
Equipment: $100,000
Basil was notified of a significant change in demand for the product produced by the machine, and decided to test for impairment. Basil obtained the following data:
Future cash flows (undiscounted): $78,000
Value in use (discounted): 73,000
Fair value: 75,000
Selling costs: 3,000
Required:
Assuming Basil Corporation follows ASPE, calculate if the asset is impaired, and prepare any
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