On July 1, 2005, Zeibart Company purchases equipment for \(\$ 225,000\). The equipment has an estimated useful life of 10 years and expected salvage value of \(\$ 25,000\). The company uses straight-line depreciation. On July 1,2009 , economic factors cause the fair value of the equipment to decline to \(\$ 90,000\). On this date, Zeibart examines the equipment for impairment and estimates \(\$ 125,000\) in undiscounted expected cash inflows from this equipment.

a. Compute the annual depreciation of the equipment for fiscal years ending July 1,2006 through July 1,2009 .

b. Compute the equipment's net book value at July 1, 2009 .

c. Apply the test of impairment to this equipment as of July 1, 2009. Is the equipment impaired? Show supporting computations.

d. If the equipment is impaired at July 1,2009 , compute the impairment loss.