Based on the following information, what is the net amount that this equipment should be reported at on FlexiHose's balance sheet at December 31, 2021? $$\begin{array} { | l | r | }
\hline \text { Cost } & \$ 500,000 \
\hline \text { Accumulated depreciation } & 250,000 \
\hline \text { Value in use (sum of discounted cash flows) } & 220,000 \
\hline \text { Fair value } & 240,000 \
\hline \text { Disposal costs } & 10,000 \
\hline
\end{array}$$
A)$220,000
B)$230,000
C)$240,000
D)$250,000

Question

Based on the following information, what is the net amount that this equipment should be reported at on FlexiHose's balance sheet at December 31, 2021? $$\begin{array} { | l | r | } 
\hline \text { Cost } & \$ 500,000 \
\hline \text { Accumulated depreciation } & 250,000 \
\hline \text { Value in use (sum of discounted cash flows) } & 220,000 \
\hline \text { Fair value } & 240,000 \
\hline \text { Disposal costs } & 10,000 \
\hline
\end{array}$$
A)$220,000
B)$230,000
C)$240,000
D)$250,000

Quizplus · Accepted Answer

The net amount should be the higher of the value in use ($220,000) and the fair value less disposal costs ($240,000 - $10,000 = $230,000). Therefore, the equipment should be reported at $230,000.

Based on the Following Information, What Is the Net Amount