A machine cost $$900,000$ and was purchased on April $1,2022.$ Its estimated salvage value is $$90,000$ and its expected life is eight years.

Instructions

$(1)$ Calculate the depreciation expense $($to the nearest dollar$)$ by each of the following methods, showing your calculations:

$($a$)$ Straight$-$line $(2022)$

$($b$)$ Double$-$declining balance $(2024)$

$($c$)$ Sum$-$of$-$the$-$years'$-$digits $(2023)$

$(2)$ Which method would result in the smallest gain if sold in $2023$ after depreciation was recorded for the year?

$(3)$ Use the calculations from $($a$)$ above and assume the company used the straight line method to calculate depreciation. In January of $2024,$ after depreciation was recorded for $2022$ and $2023,$ the company became concerned that the asset was impaired. Determine if the asset is impaired and record the entry for the impairment if necessary. Net cash flows over the remaining life of the asset are expected to be $$500,000.$ The fair market value of the asset is $$400,000.$