Oak Inc. has the following information regarding its assets: What amount of loss should be recorded due to asset impairments?
A) $10,000.
B) $9,000.
C) $8,000.
D) $7,000.

Question

Oak Inc. has the following information regarding its assets:  What amount of loss should be recorded due to asset impairments?
A) $10,000. 
B) $9,000. 
C) $8,000. 
D) $7,000.

Quizplus · Accepted Answer

Only the equipment is impaired since its estimated future cash flows are less than book value. The impairment loss is calculated as the difference between the book value and the fair value (35,000 ? $28,000) = $7,000.

Oak Inc Has the Following Information Regarding Its Assets: What