Question 11
The management of Skysong Inc., a small private company that
uses the cost recovery impairment model, was discussing whether
certain equipment should be written down as a charge to current
operations because of obsolescence. The assets had a cost of
$900,000, and depreciation of $350,000 had been taken to December
31, 2017. On December 31, 2017, management projected the
undiscounted future net cash flows from this equipment to be
$340,000, and its fair value to be $200,000. The...