Allison Company purchased a machine for $1,200,000 at the beginning of 2018.Allison was using the double-declining-balance (200%)method to depreciate the asset and its useful life was estimated to be 5 years with a residual value of $200,000.At the end of 2019,Allison Co.estimates the future cash flows from the asset to be equal to $500,000 and the fair value to be $450,000.
What is the amount of the impairment loss?

Question

Quizplus · Accepted Answer

The Answer of Allison Company purchased a machine for $1,200,000 at the beginning of 2018.Allison was using the double-declining-balance (200%)method to depreciate the asset and its useful life was estimated to be 5 years with a residual value of $200,000.At the end of 2019,Allison Co.estimates the future cash flows from the asset to be equal to $500,000 and the fair value to be $450,000.
What is the amount of the impairment loss?

Allison Company Purchased a Machine for $1,200,000 at the Beginning