At 12/31/18 Anthro Inc. has equipment which cost $950,000 that management believes might need to be adjusted in value on their balance sheet because the value is impaired. Depreciation to date on this equipment is $490,000. The projected future cash flows from the use of this equipment is $450,000 spread evenly over the next five years. The fair market value at 12/31/18 is $465,000.

_A__21 Which statement best describes the status of this asset?

1. The asset is impaired and the loss equals $5,000
2. The asset is not impaired, no loss should be recorded
3. The asset is impaired but no impairment loss has been incurred
4. The asset is impaired and the impairment loss is $10,000