Little House Inc. purchased equipment for $2,400,000 in 2025. Three years later, the equipment has accumulated depreciation of $750,000 and Little House has concerns that the equipment has been impaired. Future cash flows are estimated to be $1,580,000. The current fair value of the equipment is estimated to be approximately $1,400,000.

1. Calculate the amount of the impairment, if any. Show your work.
2. If required, prepare a journal entry to record the impairment

Answer rating: 100% (QA)

To calculate the impairment loss we compare the carrying amount of the equipment book value with its ... View the full answer