Carey Inc., a publicly accountable entity acquired the assets of Shelton Corp. on May 1, 2017. As part of the asset acquisition, Carey acquired a customer list that was ascribed a fair value of $320,000 with an estimated remaining useful life of 8 years, with no residual value, when acquired.

It is now December 31, 2019 and the management of Carey Inc. are reviewing the assets acquired and have determine there is the possibility that the value of the customer list has become impaired due to declining sales projected for the future. You have been provided with the following information relating to the value of customer list (CL) at December 31, 2019:

Undiscounted cash flows from CL $225,000

Discounted cash flows from CL (that is, value in use) 196,000

Fair value of CL 180,000

Expected costs to sell the customer list 25,000

REQUIRED

1. Prepare the December 31, 2019 journal entry to recognize the impairment of the customer list (if any). Please show all calculations that led to your determination of impairment or the lack of impairment. (5 marks)