In 2011, Yondoor Inc. Company acquired production machinery which now has a book value of $740,000. The undiscounted cash flows from use of the machinery is $365,000. and it’s fair value is $305,000. Yondoor has determined that an impairment loss has occurred. What is the carrying value of the machinery after the journal entry to record the impairment loss has been recorded?
A. $445,000
B. $375,000
C. $365,000
D. $305,000
Answer:D
In 2011, Yondoor Inc. Company acquired production machinery which now has a book value of $740,000. The undiscounted cash flows from use of the machinery is $365,000. and it’s fair value is $305,000. Yondoor has determined that an impairment loss has occurred. What is the carrying value of the machinery after the journal entry to record the impairment loss has been recorded?
A. $445,000 B. $375,000 C. $365,000 D. $305,000