Bass Inc. Has reached the end of its fiscal year and realizes that some of its l

Question

Bass Inc. Has reached the end of its fiscal year and realizes that some of its long-term assets might be impaired. From the information below, determine the impairment loss for Bass.

       Asset            Fair value       Estimated cash flows       Book value

       Truck             $14,000           $13,000                          $17,000

      Equipment         $8,000            $12,000                        $12,000

       Machine           $7,000            $11,000                      $14,000

A. No impairment loss exists

B. $12,000

C. $10,000

D. $14,000

E. $7,000

Explanation / Answer

E

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