Robertson Inc. bought a machine on January 1, 2000 for $300,000. The machinehad an expected life of 20 years and was expected to have a salvage value of$30,000. Robertson uses straight-line depreciation. On July 1, 2010, the companyreviewed the potential of the machine and determined that its undiscounted futurenet cash flows totaled $150,000 and its discounted future net cash flows totaled$105,000. If no active market exists for the machine and the company does notplan to dispose of it, what should Robertson record as an impairment loss on July1, 2010?a. $ 0b. $ 8,250c. $15,000d. $53,250

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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Robertson Inc. bought a machine on January 1, 2000 for $300,000. The machine
had an expected life of 20 years and was expected to have a salvage value of
$30,000. Robertson uses straight-line depreciation. On July 1, 2010, the company
reviewed the potential of the machine and determined that its undiscounted future
net cash flows totaled $150,000 and its discounted future net cash flows totaled
$105,000. If no active market exists for the machine and the company does not
plan to dispose of it, what should Robertson record as an impairment loss on July
1, 2010?
a. $ 0
b. $ 8,250
c. $15,000
d. $53,250

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