On December 31, Year 1, Brown Brothers purchased machine A for $ 770,000 and machine B for

Question:

On December 31, Year 1, Brown Brothers purchased machine A for $ 770,000 and machine B for $ 300,000. The machines are depreciated on the straight- line basis over 10 years with no . Brown reviews its assets for impairment annually. While doing the U. S. impairment analysis at year- end Year 6, Brown determines that the expected future cash flows are $ 70,000 per year from machine A and $ 40,000 per year from machine B over the remaining lives of the assets. At December 31, Year 6, the fair values of machines A and B are $ 300,000 and $ 180,000, respectively. What amount of impairment loss should Brown report on its Year 6 income statement under U. S. ?
a. $ 85,000
b. $ 35,000
c. $ 50,000
d. $ 0
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