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ERA Inc. bought a machine for $600,000 on Jan 1. 2018. The company expected to use this machine for the next five years, when the machine would be sold for $45,000. On Jan 1. 2020, their major customer gave notification that they were terminating ERA Inc. as a supplier. ERA Inc’s accountants estimate that the machine will generate $200,000 in future cash inflows from other customers and the fair value of the machine is $180,000. ERA uses the accelerated depreciation method.
a) Calculate the net book value of this machine on Jan 1, 2020
b) Is this machine impaired on Jan 1, 2020? Why?
c) If the equipment is impaired, what is the impairment loss on Jan 1, 2020? 12nt Y Dararanhy R T
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